Department of Justice Opts to Intervene in False Claims Act Case Against Symantec, Corp.

As you well know, the Department of Justice has discretion to decide whether it will intervene in a whistleblower case. While only a small fraction of False Claims Act cases receive federal government intervention, qui tam plaintiffs may opt to continue on with their case without the government if they so choose. However, when the Department of Justice decides to intervene, it is usually because the case carries a strong likelihood of success, as well as a sizable recovery.

In today’s case, we review a recently unsealed filing against the Symantec Corporation – a company with a contract to provide software and equipment to various federal agencies, including the General Services Administration. According to the complaint, Symantec knowingly defrauded the government for a period spanning several years, and collected income under the fraudulent scheme totaling hundreds of millions of dollars.

The Case Against Symantec

The whistleblower lawsuit against Symantec Corporation was filed by a former employee in 2012. Under the terms of the contract between Symantec and the federal government, it was required to routinely monitor the prices and discounts offered to the general public, and provide a comparable price for software, updates, and services to the federal government. According to the relator’s complaint, the company failed to abide these terms and consistently charged the federal government full price for services – despite offering “deep discounts” to consumers and other businesses.

Under the terms of the often-used “price reduction clause,” Symantec was under a continual obligation to offer the best price for its product. If Symantec failed to offer the government its best price for a product, any overcharge could trigger liability under the False Claims Act. Here, this is exactly what the relator has alleged, and Symantec is now under a federal investigation following the Department of Justice’s intervention in the matter.

Breadth of False Claims

As with any public company, Symantec is required to file quarterly reports with the Securities and Exchange Commission, which are public documents made available to the general public and, in particular, shareholders of the company. In one recent filing, it estimated that it sold the U.S. government nearly $222 million in software products. It also reportedly set aside $25 million to cover the speculated costs of the False Claims Act case, and described the amount as “our current estimate of the low end of the range of estimated loss.”

Government’s Response

In keeping with its dedication to eliminating fraud and waste under government contracts, the Department of Justice issued a stern response to inquiries surrounding the pending litigation: “This lawsuit demonstrates the government’s commitment to ensuring that the companies it does business with act with integrity….When the United States spends taxpayer dollars based on contractors’ representations about their business practices, we expect to be given complete and accurate information.”

The Department of Justice only intervenes in 20-25 percent of whistleblower cases. However, its success rate with cases it becomes involved with is steadily maintained at approximately 95 percent.

Contact Berger Montague Today

If you are concerned about possible fraud pursuant to a government contract, we encourage you to contact our office right away. We are a competent and aggressive whistleblower law firm dedicated to helping plaintiffs confidently come forward with reports of fraud and misconduct. For more information, contact us right away.

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By | 2019-02-20T11:48:40+00:00 July 29th, 2014|Contractor Fraud|