The EMC Corporation has paid $87.5 million to settle allegations that the company violated the False Claims Act and the federal Anti-Kickback Act.
Federal investigators say the Hopkinton, Mass.-based information technology company misrepresented its commercial pricing practices and caused the General Services Administration to enter into a contract with prices that were higher than normal.
EMC also allegedly engaged in an illegal kickback scheme designed to influence the government to purchase the company’s products. According to investigators, EMC paid consulting companies for each time they recommended that a government agency purchase an EMC product.
The kickback allegations are part of a larger investigation of government technology vendors that has resulted in settlements to date with three other companies, with several other investigations and actions still pending.
"Misrepresentations during contract negotiations and the payment of kickbacks or illegal inducements undermine the integrity of the government procurement process," said Tony West, assistant attorney general for the Civil Division of the Department of Justice. "The Justice Department is acting to ensure that government purchasers of commercial products can be assured that they are getting the prices they are entitled to."
The investigation was initiated by a lawsuit filed under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens to sue for fraud on behalf of the United States and share in any recovery.
"Companies should not keep charging higher prices to the government when costs go down. The American taxpayers deserve a better deal," said GSA Inspector General Brian D. Miller. "This case is another demonstration of the value of OIG audits."