Security Firm Overcharged Government for Health Insurance; Will Pay $1 Million

On September 18, 2009, the U.S. Department of Justice announced today a settlement between Pinkerton Government Services, Inc. (PGS) and the United States to resolve allegations that the security firm improperly billed self-insurance benefits costs under its contract to provide security services at Department of Energy installations. In accordance with the agreement, PGS, a subsidiary of Securitas Security Services, USA, Inc., will pay the United States $1,016,500.

The investigation was initiated by a lawsuit called a qui tam action filed under the False Claims Act by two whistleblowers. Under the provisions of the False Claims Act, whistleblowers who qualify under the statute are eligible to receive up to 25 percent of the settlement recovery in cases the Government pursues. Under the civil settlement announced today, the whistleblowers will receive a total share of $172,805.

The details of the case are as follows: From October 2001 through September 2005, PGS had a contract with DynMcDermott Petroleum Operations Company (DM) to provide security services at installations that DM operates and manages on behalf of the Department of Energy. Under its contract, PGS was reimbursed for all costs, including costs of providing health insurance to its employees, by the Department of Energy. The Government alleged that, from April 2002 through the end of its contract, PGS improperly billed for costs of health insurance under its parent company’s self-insurance program without first obtaining approval for these costs in accordance with its contract. The Government alleged that, as a result of PGS’s failure to seek approval for its self-insurance healthcare costs, the United States, through its management contractor DM, was overcharged. The settlement resolves PGS’s potential liability under the False Claims Act arising from the United States’ investigation.

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