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FCA State

This archive displays posts tagged as relevant to state and local False Claims Acts. You may also be interested in the following pages:

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Tyco — Government Contracting Fraud/Noncompliance with Industry Standards ($60 million).

One of our whistleblower attorneys led the representation of Nora Armenta and dozens of California municipalities in a qui tam action under the False Claims Act against Tyco International, Mueller Co., and the James Jones Company, alleging they sold waterworks parts to municipal water systems that were made with 40% more lead than allowed by industry standards. According to her complaint, Ms. Armenta repeatedly warned her superiors that the parts were for drinking water, but was ignored. The defendants settled the case, but only after 13 years of litigation, including three successful appeals that reversed unfavorable trial rulings. The defrauded municipalities received $60 million, and Ms. Armenta received a whistleblower reward of $15 million.

LA Dep’t. of Water & Power — Government Contract Fraud/Utility Overcharges ($224 million).

Four of our whistleblower attorneys led the representation of whistleblower Sam Barakat, as well as the County of Los Angeles, the Los Angeles Unified School District, and other government agencies in a whistleblower action against the Los Angeles Department of Water and Power. The plaintiffs alleged that the DWP had overcharged these schools and other public agencies for electric power over a ten-year period of time. The case involved a ground-breaking legal theory that had never been tested in court. It also involved dissecting elaborate cost accounting to demonstrate government customers had been overcharged relative to the true cost of service. Following a two-month trial, a verdict was returned against the DWP for $224 million. See LA Times, UT San Diego, and National Law Journal for more.

Hanson Aggregates — Government Underpayments on Public Resource Lease ($48 million).

Two of our whistleblower attorneys led the representation of a whistleblower in a qui tam action filed under the California False Claims Act alleging underpayments (or “reverse false claims”) under a public resource lease. Specifically, the three defendants, which were engaged in dredging and selling sand and gravel from public lands, were alleged to have paid the State of California less than what was owed by under-reporting the quantity of the sand and gravel removed, as well as its value. Dubbed the “sand pirates” by the media, the defendants allegedly “sold” the sand to affiliated companies they set up, and used artificially deflated prices from those purported sales, instead of the prices paid in real third party transactions when calculating and reporting royalties due the State. Critical issues concerning the proper interpretation of the related leases and related accounting issues were resolved in favor of the government following a seven week trial, in which one of our whistleblower lawyers served as lead trial counsel. The case settled before the next trial phase. California recovered $48 million in combined settlement payments and price adjustments. The whistelblower, a tugboat captain, received a whistleblower award of 30% of the government’s recovery. It was the second-largest recovery for a whistleblower under California state law. See California AG Press Release and Oakland Tribune for more.

NEC — Government Contracting/Bribes and Kickbacks ($5 million).

One of our whistleblower attorneys was hired by the San Francisco Unified School District to pursue a False Claims Act case against NEC Business Network Solutions, a large supplier of computer systems under the government’s “E-Rate” program. E-Rate provided government subsidies for the purchase of computer equipment for school classrooms, seeking to bridge the “digital divide.” According to the complaint, NEC paid bribes and kickbacks to school officials, causing them to order excess equipment purchased with federal funds. One of the recipients of the illegal bribes was convicted and sentenced to 21 months in prison. Using a novel theory, the San Francisco school district “blew the whistle” on the company, and received an award of $5 million. See NY Times for more.
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