CIA Contractors Resolve False Claims Act Lawsuit for $3 Million

March 25, 2013 — Government contractors who pay kickbacks in order to receive contracts from the United States government are in violation of the federal False Claims Act. Kickback schemes may be discovered by employees on either side of the transaction — those who work for the unscrupulous government contractor paying the kickbacks or those who work for the government and observe the misconduct their co-workers are engaged in. At times, contractors may pay off their own employees just to keep them quiet or they may let employees know that their jobs are on the line. Many workers would rather collaborate with the government than participate in a kickback scheme they know is wrong.

U.S. Claims Contractors Gave Kickbacks to Government Employees

Corning Cable Systems LLC, Anixter International Inc. and American Systems Corporation have agreed to settle a False Claims Act lawsuit for $3 million. The suit was filed by William Jones, a former Anixter sales representative, who alleged that the contractors engaged in violations of the Anti-Kickback Act while bidding on a CIA contract. The qui tam provisions of the False Claims Act authorize tipsters to file a lawsuit on the government’s behalf and then share in the proceeds from any recovery. For his portion of the government’s recovery in this case, Jones will receive $585,000.

According to the Justice Department, the kickbacks in this case were paid in 2009 while American Systems was bidding on a CIA contract for supplies and services. American Systems and Anixter teamed up to bid on the contract and brought Corning in as a supplier. In order to influence the bidding process, the three contractors are alleged to have showered CIA employees and outside consultants with tickets to sporting events, meals and other gifts. Further, alleged the government, the contractors were improperly provided with source selection information from one of the CIA employees who had benefitted from the companies’ illegal kickbacks.

Employee Informants Use False Claims Act to Combat Fraud

Government collaborators have rights under the False Claims Act. The aggressive lawyers at Waters & Kraus have long experience in protecting the interests of whistleblowers who notify the government of contractor fraud. Contact us or call our whistleblower attorneys at 800.226.9880 to find out more about our qui tam practice and how we can assist you.

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