Consumer Fraud

U.S. intervenes in whistleblower lawsuit against Symantec

osha whistle U.S. intervenes in whistleblower lawsuit against SymantecThe U.S. government has intervened in a whistleblower lawsuit against Symantec Corporation that alleges the company, contracted by the U.S. General Services Administration to provide security software services, defrauded the agency by submitting false claims.

Lori Morsell, a former Symantec employee, filed the lawsuit in the District of Columbia under the False Claims Act, which allows individuals to sue on behalf of the federal government when they have solid, original evidence of fraud and other wrongdoing committed against a U.S. government agency or program.

Ms. Morsell alleges in her lawsuit that Symantec knowingly falsified information about the prices it offered to commercial customers during negotiation of its contract with the U.S. government and in the services it later provided under contract.

The General Services Administration used Symantec’s disclosures about its commercial sales prices to negotiate the minimum discounts Symantec was required to provide to other government agencies that bought the company’s software.

The contract also required that Symantec notify the General Services Administration when better commercial discounts became available and extend those same discounts to the government. The lawsuit alleges that Symantec failed to do this throughout its 2007-2012 contract, causing the government to spend an estimated $145 million more in Symantec goods and services  than it should have had it been given the same discounts as the company’s private-sector customers.

Mountain View, Calif.-based Symantec is a Fortune 500 software company that reported more than $6 billion in revenue in fiscal year 2011.

The U.S. False Claims Act’s whistleblower provisions have helped the U.S. government recover billions of dollars in funds for federally funded agencies and programs. To encourage individuals to report fraud, waste, abuse and other wrongdoing when they witness it, the False Claims Act rewards whistleblowers between 15 and 30 percent of the total recovery.

The False Claims Act gives the U.S. the right to intervene and effectively take over litigation of any lawsuit filed on its behalf, as it chose to do in this case.


Wall Street Journal
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