This week’s Department of Justice “Catch of the Week” goes to PC Specialists Inc., doing business as Technology Integration Group (TIG). On Tuesday, the San-Diego-based computer supply company agreed to pay $5.9 million to settle charges it inflated the price of computers sold through another company to the National Nuclear Security Administration (NNSA) for use at Sandia National Laboratories in Albuquerque, New Mexico. See DOJ Press Release.
From 2003 to 2013, TIG sold Dell computers to Sandia Corporation for resale to the United States under Sandia’s contract with the NNSA. According to the government, TIG knowingly inflated the amounts it charged Sandia by failing to give credits for rebates and discounts it received from Dell as required by its contract and causing false claims to the government for the inflated prices.
This settlement is in addition to a non-prosecution agreement the company entered into in April with the U.S. Attorney’s Office of the District of New Mexico. That agreement settled related charges that three employees in TIG’s Albuquerque branch office defrauded the government by inflating the amounts it charged Sandia for computers. The agreement required TIG to terminate the employment of the three employees and retain and pay for an independent monitor to monitor TIG’s compliance with the agreement, and TIG policies and training relating to federal government contracts.
In announcing the current settlement, the government made it clear it will not stand for this kind of government contract fraud. Benjamin C. Mizer, head of the Justice Department’s Civil Division, remarked: “Today’s settlement demonstrates that diverting funds from the critical mission of the laboratories by inflating costs and making false claims or causing others to make false claims for government funds will not be tolerated.” And U.S. Attorney Damon P. Martinez of the District of New Mexico added: “Fraud involving government contracts will be zealously pursued in New Mexico.”
The government’s allegations arose from a whistleblower lawsuit filed by Maverick Granger, a former TIG executive in Albuquerque, under the qui tam provisions of the False Claims Act. He will receive a yet-to-be determined whistleblower award.
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