CORPORATE CRIME REPORTER
Oracle to Pay $199.5 Million to Resolve False Claims Charge
25 Corporate Crime Reporter 39, October 6, 2011
It’s one of the top 30 of all time False Claims Act settlements, according to Patrick Burns of Taxpayers Against Fraud.
Oracle Corp. and Oracle America Inc. will pay $199.5 million plus interest for failing to meet their contractual obligations to the General Services Administration (GSA).
Oracle, which is based in Redwood City, Calif., develops, manufactures, markets, distributes and services database and middleware software, applications software and hardware systems.
In 1988, Oracle entered into a contract to sell software licenses and technical support to government entities through GSA’s Multiple Award Schedule (MAS) program.
The settlement resolves allegations that, in contract negotiations and over the course of the contract’s administration, Oracle knowingly failed to meet its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers, and that Oracle knowingly made false statements to GSA about its sales practices and discounts.
The settlement resolves allegations that Oracle knowingly failed to comply with the price reduction clause of its GSA contract by not disclosing to GSA discounts Oracle gave to its commercial customers when they were higher than the discounts that Oracle had disclosed to GSA, and by failing to pass those discounts on to government customers.
Because of these allegedly fraudulent dealings, the United States alleges that it accepted lower discounts and ultimately paid far more than it should have for Oracle products.
The settlement resolves a lawsuit filed on behalf of the U.S. government by former Oracle employee, Paul Frascella, who will receive $40 million as his share of the recovery in the case.
Under the whistleblower provisions of the False Claims Act, private citizens can bring lawsuits on behalf of the United States and share in any recovery obtained by the government.
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