Whistleblower Lawsuit Results in Nearly $200 Million Settlement

05/30/2012 // San Francisco, CA, USA // Whistleblower Law Firm // Jeffrey Keller // (press release)

In what whistleblower lawyers are calling a landmark settlement, Oracle Corp. and Oracle America Inc. have agreed to pay the U.S. General Services Administration $199.5 million to resolve allegations of unlawful practices by the software giant during its involvement in a program to sell goods and services to government purchasers. The settlement resolves a whistleblower lawsuit brought on behalf of the U.S. Government by a former Oracle employee, Paul Frascella, who will receive $40 million as his share of the recovery.

Under the False Claims Act, private citizens can bring lawsuits on behalf of the United States and share in any recovery obtained by the government. Since January 2009, the government’s total recoveries in False Claims Act cases have totaled more than $8.1 billion. Oracle’s nearly $200 million payment represents the largest single False Claims Act settlement ever obtained by the General Services Administration, according to the U.S. Department of Justice, which announced the case’s resolution on October 6, 2011. It is also, say whistleblower lawyers, an important reminder that employees who speak out about unlawful and fraudulent practices are essential for shedding light on corporate wrongdoing, and need the protections and provisions that whistleblower laws provide.

“This settlement, the largest recovery ever for the GSA under the whistleblower statute known as the False Claims Act, would never happen without the assistance of employees and former employees like Mr. Frascella who shed light on these frauds,” says Eric A. Grover, a founding partner at Keller Grover, a nationally recognized labor and employment law firm, and a whistleblower lawyer. “Whistleblowers often suffer termination and retaliation simply for doing the right thing, and these statutes make sure that they are treated fairly, and that justice — for them, for the government, and for every private citizen impacted by wrongdoing — prevails.”

In the Oracle case, Frascella had alleged that Oracle — a leading developer and distributor of database, middleware, and application software — had failed to meet its contractual obligations to the GSA under the agency’s Multiple Award Schedule (MAS) program, which provides the government and other GSA-approved parties with a streamlined process for purchasing commercial goods and services. Contract terms require sellers to disclose their pricing policies and practices — including the best discounts offered other customers. Oracle was accused of knowingly failing to provide GSA with all of this information and as a result, the whistleblower lawsuit claims, the GSA did not know that larger discounts had been offered to non-GSA purchasers, and paid more for Oracle products than it should have.

Introduced in 1863, the False Claims Act grew out of an effort to combat fraud by suppliers during the Civil War. Revised since that time, the law remains an important tool for identifying — and stopping — wrongful behavior by those who contract with the government.

“Whistleblowers can help to insure that every contract with every agency is performed in a way that assures taxpayer dollars are used properly,” says Grover. “A vitally important law, the False Claims act not only encourages whistleblowers by promising them a percentage of the damages recovered, but protects them from wrongful dismissal. It makes sure that people doing the right thing are rewarded, not punished, for their actions.”

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