Netcracker Technology Corp. and Computer Sciences Corp. Agree to Settle Civil False Claims Act Allegations
The government’s crackdown on fraud under the False Claims Act continues unabated. Two governmental contractors – Netcracker Technology Corp (NTC) and Computer Sciences Corp (CSC) – have agreed to pay the government a total of $12.75 million to resolve allegations under the False Claims Act claiming that both companies used individuals who did not have security clearance on a Defense Information Systems Agency (NISA) contract. NTC – headquartered in Waltham, Mass – has agreed to pay $11.4 million and CSC – headquartered in Falls Church, Virginia – has agreed to pay $1.35 million. Specifically, the government alleges that from 2008 through 2013 Netcracker used employees who it knew did not have security clearance to perform work it knew required clearance in compliance with DISA and government regulations. The government further alleges that CSC then recklessly submitted those false claims for payment to DISA. Netcracker – a government contractor- and CSC – a subcontractor – implemented software used to help manage the telecommunications network used by the U.S. Department of Defense.
Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division and U.S. Attorney Channing D. Phillips of the District of Columbia both stated the government’s need to maintain the integrity of the procurement process by pursuing violations of the False Claims Act. In recent months the US government has been aggressively cracking down on companies that are alleged to have defrauded the government. Since January 2009, the Justice Department has recovered more than $25.3 billion through False Claims Act cases.
The settlement by NTC and CSC resolves a lawsuit filed under the whistleblower act provision of the False Claims Act; whistleblower lawsuits are also referred to as Qui tam law suits. The law permits parties who file under this section of the False Claims Act to obtain a portion of the government’s recovery. John Kingsley, a former Netcracker employee who informed on his company’s practices, is entitled to and will receive a whistleblower reward of $2,358,750. The resolution in this matter was the result of a joint effort between the U.S. Attorney’s Office of the District of Columbia, the Civil Division’s Commercial Litigation branch and the DISA IG Office