Hewlett-Packard Will Pay $55 Million to Resolve Fraud Allegations
September 8, 2010
On August 30, 2010, the U.S. Justice Department announced that Hewlett-Packard Co. (HP) has agreed to pay the United States $55 million to settle claims that the company defrauded the General Services Administration (GSA) and other federal agencies. The settlement resolves allegations under the False Claims Act that HP knowingly paid kickbacks, or “influencer fees,” to systems integrator companies in return for recommendations that federal agencies purchase HP’s products. The settlement also resolves claims that HP’s 2002 contract with the GSA was defectively priced because HP provided incomplete information to GSA contracting officers during contract negotiations.
The allegations that HP improperly paid kickbacks were first made in a lawsuit that whistleblowers Norman Rille and Neal Roberts filed in the U.S. District Court for the Eastern District of Arkansas in 2004. Under the qui tam provisions of the False Claims Act, private citizens may file actions for fraud on behalf of the United States and share in any recovery.
The allegations that HP improperly paid kickbacks were first made in a lawsuit that whistleblowers Norman Rille and Neal Roberts filed in the U.S. District Court for the Eastern District of Arkansas in 2004. Under the qui tam provisions of the False Claims Act, private citizens may file actions for fraud on behalf of the United States and share in any recovery.
“Americans deserve the best deal possible when their hard-earned tax dollars are used,” said GSA Inspector General Brian D. Miller. “We will aggressively pursue companies that overcharge the government.”
The United States has settled kickback allegations similar to those made in this case in matters involving IBM for $2.9 million, Computer Sciences Corporation for $1.37 million, and PWC for $2.3 million. In addition, these same allegations were a part of a settlement with EMC Corporation which totaled $87.5 million. The EMC settlement also settled defective pricing claims found through an audit by the GSA OIG.
The United States has settled kickback allegations similar to those made in this case in matters involving IBM for $2.9 million, Computer Sciences Corporation for $1.37 million, and PWC for $2.3 million. In addition, these same allegations were a part of a settlement with EMC Corporation which totaled $87.5 million. The EMC settlement also settled defective pricing claims found through an audit by the GSA OIG.
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