Informatica recently agreed to settle a qui tam claim for over $21 million, resolving allegations that the company lied to the federal government about its commercial sales practices for the General Services Administration (GSA).

Informatica Corporation LLC is a software development company that sells tools that are used to establish and maintain data warehouses.

The company allegedly overcharged the government for its services and provided false or misleading information about its sales practices to its administration.

According to the Department of Justice, the company agreed to pay $21.57 million to resolve allegations of providing false information regarding its commercial discounting practices for its products and services to resellers. This information was reportedly sent in relation to GSA government wide contracts called “Multiple Award Schedule contracts.”

These contracts allow GSA to use commercial pricing disclosures to negotiate the maximum prices that a vendor can charge a government entity.

Informatica allegedly used falsified commercial marketing information to get the GSA to agree to insufficient pricing, which allegedly caused the federal government to overpay for these services.

These alleged actions are in violation of the Trade Agreement Act, which restricts the country of origin for goods purchased by the federal government. Informatica’s allegedly false marketing materials had impacted sales in the United States.

“Companies seeking to participate directly or indirectly in government contracts must adhere to applicable rules designed to promote the United States’ objective of prudently expending taxpayer funds by negotiating fair and reasonable pricing for the goods and services it purchases,” said the United States Attorney for the District of Columbia.

This qui tam claim was filed under the False Claims Act (FCA), and was reportedly filed by a former employee of Informatica.

Overview of the False Claims Act

The FCA allows individuals, known as whistleblowers, to report people or companies that are allegedly committing fraud against the federal government.

A whistleblower is any employee, contractor, agent, or other individual that reports activities to defraud the federal government, and is considered one of the most effective tools against government fraud.

It is important to note that sending false billing statements to the federal government is one of the most prevalent forms of healthcare fraud in the United States. The government recovered $38.9 billion under the FCA between 1987 and 2013, with approximately 70 percent of these cases reportedly brought forward by whistleblowers.

Under the FCA, companies are also prohibited from taking any retaliation against the potential whistleblower. This includes wrongful termination or withholding pay, along with other “adverse actions” including:

• Blacklisting
• Demoting
• Denying Overtime
• Denying Promotion or Other Work Advancement
• Wrongfully Denying Benefits
• Failure to Hire or Rehire
• Intimidation or Harassment
• Making Threats
• Creating Hostile Work Environment

This whistleblower participating in this qui tam claim will reportedly receive $4,314,000, with the FCA stating that most whistleblowers are eligible to receive between 15 and 30 percent of whatever settlement award is ordered.

It is important to note that to be considered a whistleblower, the person must be the primary source of information and must not use second or third party sources.

This Whistleblower Lawsuit is United States ex rel. Sullivan v. Informatica Corp., Case No. 15-0716 (D.D.C.).

This article is not legal advice. It is presented
for informational purposes only.