Corning Incorporated to Pay U.S. $5.65 Million to Resolve False Claims Allegations

March 28, 2013 — The federal False Claims Act gives the government an effective weapon to combat fraudulent schemes against the American taxpayers. The anti-fraud statute’s qui tam language enables a conscientious informant to file a lawsuit on the government’s behalf and to participate in any recovery. When the government chooses to intervene in the lawsuit, the whistleblower takes a smaller share of the recovery. When the United States opts against participation in the case, the informant is entitled to a larger portion of the proceeds.

Corning Failed to Give U.S. Best Pricing

Corning Incorporated has consented to a $5.65 million settlement to resolve allegations that the government contractor intentionally submitted false claims to the government for laboratory research products purchased by various federal agencies from the Life Sciences division of Corning, the Department of Justice has announced.

Based in New York, Corning makes ceramic and glass components for a variety of industries, including life sciences, mobile emissions controls, consumer electronics, and telecommunications. The government alleged that in 2005, Corning contracted with the General Services Administration (GSA) through its Multiple Award Schedule (MAS) program to sell laboratory research products to a number of federal entities. The MAS program offers a streamlined process through which government purchasers authorized by the GSA can procure routine commercial goods and services from contractors. The contractors must:

  • agree to sell their products to the government at the best price given to any commercial customer
  • update the government about existing commercial pricing practices, and
  • update the government about future changes to commercial contract terms.

The arrangement allows contractors the advantage of selling to hundreds of government customers through a single government contract, and it ensures that the federal government receives the best possible pricing.

But according to allegations made by whistleblower Kevin Jones, a former Corning Life Sciences sales representative, Corning did not abide by the terms of its contract with the government. In a qui tam whistleblower lawsuit filed in federal court in Washington, D.C., Jones charged that Corning violated the False Claims Act by choosing not to provide the GSA with up-to-date and accurate information about the company’s discounts to other customers. Further, Jones alleged, Corning did not offer the same discounts to its government purchasers that it gave to commercial customers. As a result, the United States government paid much more for Corning’s products than it should have.

As a reward for collaborating with the government, Jones will receive $904,000 for his portion of the government’s recovery.

False Claims Act Violations Brought to Light by Contractor Insiders

Government contractors that violate best-pricing rules are often discovered by insider sales or accounting employees working for the unscrupulous contractor. Before notifying the government, whistleblowers should know their rights under the qui tam provisions of the False Claims Act. The knowledgeable lawyers at Waters & Kraus provide the aggressive legal representation needed. Contact us or call our government contractor fraud lawyers at 800.226.9880 to discuss how we can protect and advance your rights.

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