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DoJ Joins Whistleblower Suit Against Oracle; Intervention Complaint Expected Soon

June 21, 2010

Whistleblower Paul Frascella — a contract specialist for Oracle Corporation — filed a sealed qui tam action against the mammoth software company for allegedly overcharging the government on GSA contracts. It took the government more than thee years to investigate the 27-page Complaint (and more than 300 pages of Exhibits), but unsealed court documents indicate that the DoJ has found merits in the allegations and will serve a Complaint in intervention upon Oracle very soon. According to Frascella’s allegations, Oracle circumvented its obligation to provide lowest prices to the government through a variety of schemes, including:

  • selling discounted products to non-government customers through resellers;
  • falsely manipulating use licenses and deliberately refusing to enforce them “with a wink and nod”; and
  • “whiting out the list prices and/or discounts in excess of the GSA discounting restrictions in the event of a government audit.”

After reporting these problems up the chain of command at Oracle with no results, Frascella filed suit under the qui tam provisions of the False Claims Act, which permit relators to share in between 15% and 25% of any government recovery.  DoJ’s intervention in this case comes on the heels of a $87+ million settlement with EMC Corporation of similar allegations.

To report government fraud and abuse, contact Frohsin & Barger.

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