Samsung Electronics America Settles Whistleblower Lawsuit For $2.3 Million

September 8, 2014 — The U.S. government cannot possibly investigate all the False Claims Act violations engaged in by unethical government contractors. But inside informants, like the whistleblowers in many False Claims Act lawsuits, are ideally poised to unearth violations of the statute by their employers. Under the qui tam provisions of the Act, informants who file a whistleblower lawsuit may be entitled to a substantial portion of the government’s recovery as compensation for their courage in stepping forward.

Samsung Allegedly Violated False Claims Act By Causing Its Resellers To Submit False Claims Under GSA MAS Contracts

Samsung Electronics America Inc. (Samsung) will resolve a whistleblower lawsuit alleging False Claims Act violations with a $2.3 million settlement. The case was originally filed by Robert Simmons, who formerly worked for Samsung. Simmons alleged that the New Jersey electronics distributor caused the submission of false claims for payment under General Service Administration (GSA) Multiple Award Schedule (MAS) contracts. Mr. Simmons’ share of the government’s proceeds has not been decided upon.
The Trade Agreements Act of 1979 (TAA) prohibits the United States from buying foreign products made in a country with which the U.S. does not have a trade agreement. The statute is intended to ensure that the U.S. purchases goods only from countries that trade fairly with us.
The GSA awards MAS contracts to several companies that supply comparable goods and services. Any federal agency is permitted to make purchases under an MAS contract. The GSA awards MAS contracts only to vendors that certify that all of their products comply with the requirements of TAA.
Several Samsung-authorized resellers have been awarded GSA MAS contracts. Samsung issues certifications to these resellers that the products Samsung provides to the resellers are TAA compliant. The resellers then list those products for sale on their GSA MAS contracts.
Between January 2005 and August 2013, Samsung allegedly provided its resellers with false information concerning the country of origin of the products Samsung supplied to the resellers. This resulted in the resellers’ sale of noncompliant products on GSA MAS contracts. In particular, Samsung allegedly told its resellers that certain products were made in Mexico or Korea, which are both TAA designated countries, when in reality the products were made in China, which is not a designated country under the TAA. Samsung’s misrepresentation to its resellers allegedly caused a corresponding misrepresentation to the federal agencies with which the resellers contracted, in violation of the False Claims Act.

False Claims Act Lawsuits Discourage Abuse

Although Waters Kraus Paul & Siegel is not handling this particular case, we do represent whistleblowers around the country in similar False Claims Act lawsuits. If you have comparable claims against a different government contractor, email us or call our qui tam lawyers at 855.784.0268 to learn more about our practice and how we can work together to notify the government about fraud and abuse. Our qui tam lawyers, like Michael Armitage and Gary Paul in the firm’s California office, are committed to safeguarding informants’ interests in whistleblower lawsuits.

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