Government Announces Million Dollar Payday For False Claims Act Whistleblower

Officials with the U.S. Attorney's Office have announced that a whistleblower will receive more than $1.8 million for his share of a recent settlement with a defense contractor. The case was launched after the whistleblower, Richard Priem, revealed that a major defense contractor had defrauded the government of millions through overbilling.

The lawsuit against Science Applications International Corporation was first filed under the qui tam whistleblower provisions of the False Claims Act. Priem was the company's former project manager for a first responder training program. Priem spent almost 16 years working for SAIC after spending two decades with the Army.

His department was hired by the government to provide homeland security training programs to first responders. Rather than simply do the task for the proper price, SAIC created inflated bills. Specifically, the whistleblower claim said that SAIC's proposal to the government included claims that the company would be using more expensive personnel than it actually intended to use on the project. Priem said that high-level executives with SAIC were fully aware of the billing issues and often would discuss their fear of being caught.

The U.S. Attorney's Office in Albuquerque announced this past week that it had settled with SAIC for $11.75 million and that of that amount, Priem was entitled to nearly $2 million. The government said it was eager to pursue the company for the money it was overbilled to set an example for other companies that might think they can get away with such misbehavior. The U.S. Attorney said that had SAIC honestly billed the government its trust costs, then there would have been additional money available to pay for potentially lifesaving training for more first responders.

The False Claims Act has one of the strongest whistleblower protection provisions in the United States. The FCA allows private citizens to sue companies that are defrauding the federal government and recover funds on the government's behalf. Whistleblowers are awarded between 15 and 25 percent of the recovery once the government joins the case. The program allows any person with evidence of fraud against federal programs or contracts to file a qui tam lawsuit. However, if the government or a private party has already filed a False Claims Act lawsuit based on the same evidence as you, you cannot bring a lawsuit.

Sources:

Whistleblower to Get $1.8M as Part of Settlement, published at Businessweek.com on June 26, 2013.

SAIC Pays Nearly $12M to Settle Allegations of Inflated Pricing, by Marjorie Censer, published at WashingtonPost.com on June 13, 2013.

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