The U.S. Justice Department said it filed a complaint under the False Claims Act against Oracle Corporation alleging that company defrauded the federal government on a General Services Administration (GSA) software contract that was in effect from 1998 to 2006 and “involved hundreds of millions of dollars in sales.”
In filing the complaint, the Justice Department said it also intervened in a 2007 civil suit against Oracle filed by Paul Frascella, the company’s Senior Director of Contract Services. The False Claims Act allows private citizens with knowledge of fraud to file whistleblower suits on behalf of the United States and share in any recovery.
If the United States intervenes in the action and proves that a defendant has knowingly submitted false claims, it is entitled to recover three times the damage that resulted and a penalty of $5,500 to $11,000 per claim, the Justice Department said.
The government said the GSA had relied on disclosures about Oracle’s commercial sales practices to negotiate the minimum discounts for government agencies who bought Oracle software. The contract required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers. “Oracle misrepresented its true commercial sales practices, ultimately leading to government customers receiving deals far inferior to those Oracle gave commercial customers,” the Justice Department said in a press release.
An Oracle spokesperson could not immediately be reached for comment.
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