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Oracle Pays $46M to Settle Whistleblower Allegations of False Claims Act and Anti-Kickback Act Violations

February 3, 2011

Whistleblowers Norman Rille and Neal Roberts assisted the Government in forcing Oracle America Inc. to pay the United States $46 million “to settle claims that Sun Microsystems Inc., a corporation that merged with Oracle in 2010, submitted false claims and caused others to submit false claims to the General Services Administration (GSA) and other federal agencies,” according to DoJ. Rille and Roberts filed suit against the company under the qui tam whistleblower provisions of the federal False Claims Act and will share in 15-25% of the recovery. The payments made by Oracle resolve allegations that:

“Sun knowingly paid kickbacks to systems integrator companies in return for recommendations that federal agencies purchase Sun’s products. Sun executed agreements with consulting companies that provided for the payment of fees each time the companies influenced a government agency to purchase a Sun product…. and claims under the [False Claims Act] that Sun’s 1997 and 1999 GSA Schedule contracts were defectively priced because Sun provided incomplete and inaccurate information to GSA contracting officers during contract negotiations, as well as claims that the incomplete and inaccurate information resulted in defective pricing of Sun’s contract with the U.S. Postal Service and GSA Schedule contracts held by two resellers of Sun products. At the time Sun entered into its contracts with GSA to sell information technology products and services to federal agencies, applicable regulations and contract provisions required Sun to fully and accurately disclose to GSA how it conducted business in the commercial marketplace so that GSA could use that information to negotiate a fair price for government customers using the GSA contracts to purchase Sun products and services.”

According to Doj, the “kickback allegations are part of a larger, ongoing investigation of government technology vendors that has resulted in settlements to date with six other companies.”

To report False Claims Act violations, contact Frohsin & Barger.

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