Whistleblower Suit Results in Hewlett-Packard’s $55 Million Payout

Government Procurement Fraud

As one part of a colossal case against a multitude of information technology contractors, Hewlett-Packard (HP) has agreed to pay $55 million to settle claims that they offered kickbacks in order to unlawfully obtain contracts with various federal agencies. This settlement was just one part of a whistleblower suit that alleged the involvement of dozens of IT contractors in similar kickback schemes and resulted in $198 million in recovered government funds. HP’s agreement also resolved a set of 2002 claims that implied they had dishonestly priced their contract with the U.S. General Service Administration, leading to the program paying rates far higher than necessary.

The two whistleblowers, Norman Rille and Neal Roberts, came forward with information on this massive kickback scheme. The pair, who had been employed by similarly involved IT companies, disclosed the unscrupulous kickback practices being employed by a myriad of contractors in the information technology field. Before leaving his position at Accenture, Rille collected over 700,000 pages of electronic documentation which outlined the illicit relationship between the companies in question. He then brought the information to Roberts, a certified fraud examiner, who studied and dissected the data. His findings revealed that kickbacks were offered and received in efforts to induce referrals for government contracts, and often resulted in the abuse or waste of federal funding. Due to the nature in which they were obtained, these contracts were considered to have violated the False Claims Act, which allowed for Rille and Roberts to file their claims under the qui tam provisions of the law.

The secondary claim resolved by this this settlement involved HP’s relationship with the U.S. General Service Administration, or GSA. By definition, the GSA is an independent government agency that is tasked with the management of federal agencies, ensuring that all daily operations are supported and running smoothly. The GSA primarily handles all procurement of products and communications for these agencies, which allowed for them to enter into a contract with HP in exchange for computer equipment and software products. Provisions of this contract required HP to practice total transparency in their business operations, in order to allow the GSA to accurately represent the cost at which they would sell HP’s products to government workers. However, following an audit nearly five years later, it was discovered that Hewlett-Packard had not been entirely forthcoming, thus violating their contract. The information they withheld allowed them to inflate the cost of their contract unnecessarily, causing the GSA to pay excessive amounts for an assortment of products and services.

In the settlement reached between HP and the Department of Justice, they acknowledge no liability in either case. However, the same whistleblower case resulted in an $87.5 million settlement from another company, EMC Corporation, who was also alleged to have engaged in a related kickback scheme. The investigation and subsequent audit also uncovered defective pricing claims, similar to those submitted by HP. A further $63.7 million was paid by Accenture for their role in the elaborate scheme – and that’s just the beginning. A multitude of IT companies settled for additional lump sums, the majority of which exceeded $1 million. Though the government decided that the relators who brought forth this information were not entitled to any part of the settlements arising out of the fraudulent contract pricing claims, they were still entitled to a share of the recovered funds that stemmed from the kickback allegations. Though many of the settled cases did not disclose the whistleblower share, Rille and Roberts split $15.9 million from only two of the eight that resulted from the evidence they supplied.

Whistleblower Justice Network Can Help You

Whistleblower Justice Network partners with whistleblowers worldwide to expose schemes that purposefully overcharge the government for goods and services. We work with whistleblowers to help them report violations of the False Claims Act, while maintaining their anonymity and ensuring they file their best possible whistleblower action. Utilizing the False Claims Act, we aid whistleblowers in bringing corporations that use deceptive tactics for personal gain to justice.

If you have meaningful information regarding government procurement fraud that you believe is in violation of the False Claims Act, Whistleblower Justice Network can help. Working alongside world-class legal counsel, we will ensure you are protected to the fullest extent of the law and that you receive credit for the information you bring to the U.S. government. Partnering with whistleblowers is all we do. Visit us at www.whistleblowerjustice.net, or call us at 844-WJN-4ALL, to learn if we can help you.

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