FROM: U.S. ENVIRONMENTAL PROTECTION AGENCY
Settlement with Tyson Foods to Address Multiple Releases of Anhydrous Ammonia
Settlement requires company to conduct third party audits to reduce threat of accidental chemical releases, purchase emergency equipment for first responders
WASHINGTON — The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice announced a Clean Air Act (CAA) settlement with Tyson Foods, Inc. and several of its affiliate corporations to address threats of accidental chemical releases after anhydrous ammonia was released during incidents at facilities in Kansas, Missouri, Iowa, and Nebraska, resulting in multiple injuries, property damage, and one fatality.
"Exposure to anhydrous ammonia can cause serious health issues, and in extreme cases, even death," said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. "Today’s settlement with Tyson Foods will ensure the proper safety practices are in place in the future to protect employees, first responders, and communities located near processing facilities from the threat of dangerous chemical releases."
"This settlement will protect workers at Tyson facilities throughout Kansas, Iowa, Missouri, and Nebraska that use anhydrous ammonia, and make the communities surrounding these 23 facilities safer. It will also provide emergency response equipment for first responders to chemical releases," said Ignacia Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division. "The requirements of this agreement, which include comprehensive third party audits, will help mitigate the impact of releases of anhydrous ammonia by ensuring compliance with the Risk Management Program under the Clean Air Act."
Under the terms of the consent decree, Tyson is required to conduct third-party audits of its current compliance with the CAA’s Risk Management Program requirements at all 23 facilities in Kansas, Iowa, Missouri, and Nebraska. The third-party auditors must have expertise in ammonia refrigeration systems, be recognized experts in risk management program compliance, and be approved by EPA. Tyson must correct any violations discovered in the audits and certify the completion of the work. Tyson has also agreed to test certain piping used in its refrigeration systems at the 23 facilities to identify any problems that may have led to accidental releases and to replace any non-compliant piping.
Under the consent decree, Tyson will pay a $3.95 million penalty. Tyson has also agreed to implement a supplemental environmental project to purchase $300,000 worth of emergency response equipment for first responders in communities with significant environmental justice concerns in which Tyson operates facilities. The equipment will assist responses to emergencies involving chemicals that are regulated pursuant to the CAA Risk Management Program, including anhydrous ammonia.
Anhydrous ammonia is a poisonous gas and considered an extremely hazardous substance under the CAA. Exposure to vapors can cause temporary blindness and eye damage, as well as irritation of the skin, mouth, throat, respiratory tract and mucous membranes. Prolonged exposure to anhydrous ammonia vapor at high concentrations can lead to serious lung damage and even death.
The Clean Air Act’s Risk Management Program (Section 112(r)) requires owners and operators of facilities that exceed a threshold quantity of a regulated substance, such as anhydrous ammonia, to develop and implement a risk management plan that must be submitted to EPA. The 23 Tyson facilities named in the consent decree are subject to the regulations because the refrigeration systems at the facilities each contain more than 10,000 pounds of anhydrous ammonia. The facilities have a combined inventory of more than 1.7 million pounds of anhydrous ammonia.
Tyson Foods, Inc. is headquartered in Springdale, Ark. and is the world’s largest processor and marketer of chicken, beef and pork.
The proposed settlement lodged in the U.S. District Court for the Eastern District of Missouri, is subject to a 30-day public comment period and final court approval.
Saturday, April 6, 2013
Friday, April 5, 2013
HEALTH CARE COMPANY TO PAY $25.5 MILLION TO RESOLVE FALSE CLAIMS ALLEGATIONS
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, April 3, 2013
Intermountain Health Care Inc. Pays U.S. $25.5 Million to Settle False Claims Act Allegations
Intermountain Health Care Inc. has agreed to pay the United States $25.5 million to settle claims that it violated the Stark Statute and the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today. Intermountain operates the largest health system in the state of Utah.
The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them. The relationships at issue in this matter that the United States alleged were prohibited by the Stark Statute included employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.
"The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician's judgment about the patient's true healthcare needs," said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."
"People should expect that hospitals and doctors care more for their patients than their bottom line profits," said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. "So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations. We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice."
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
The case was handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Wednesday, April 3, 2013
Intermountain Health Care Inc. Pays U.S. $25.5 Million to Settle False Claims Act Allegations
Intermountain Health Care Inc. has agreed to pay the United States $25.5 million to settle claims that it violated the Stark Statute and the False Claims Act by engaging in improper financial relationships with referring physicians, the Justice Department announced today. Intermountain operates the largest health system in the state of Utah.
The Stark Statute restricts the financial relationships that hospitals may have with doctors who refer patients to them. The relationships at issue in this matter that the United States alleged were prohibited by the Stark Statute included employment agreements under which the physicians received bonuses that improperly took into account the value of some of their patient referrals; and office leases and compensation arrangements between Intermountain and referring physicians that violated other requirements of the Stark Statute. These issues were disclosed to the government by Intermountain.
"The Department of Justice has longstanding concerns about improper financial relationships between health care providers and their referral sources, because such relationships can corrupt a physician's judgment about the patient's true healthcare needs," said Stuart F. Delery, Acting Assistant Attorney General for the Department’s Civil Division. "In addition to yielding a recovery for taxpayers, this settlement should deter similar conduct in the future and help make health care more affordable for patients."
"People should expect that hospitals and doctors care more for their patients than their bottom line profits," said Gerald Roy, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services region including Utah. "So I applaud Intermountain for recognizing their liability and coming forward to self-disclose these violations. We will vigilantly protect taxpayer-funded health programs against Stark violations through tight coordination with our partners at the Department of Justice."
This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover more than $10.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $14.2 billion.
The case was handled by the Justice Department’s Civil Division, the United States Attorney’s Office for the District of Utah, the Office of Inspector General of the Department of Health and Human Services and the Centers for Medicare and Medicaid Services. The claims settled by this agreement are allegations only, and there has been no determination of liability.
Thursday, April 4, 2013
EPA VOIDS CERTIFICATES APPROVING IMPORT OF 70,000 VEHICLES FROM CHINA DUE TO INCOMPLETE OR FALSIFIED CERTIFICATION INFORMATION
FROM: U.S. EVIRONMENTAL PROTECTION AGENCY
EPA Voids Certificates Approving Import of Over 70,000 Small Recreational Vehicles
WASHINGTON -- The U.S. Environmental Protection Agency (EPA) announced today that it is withdrawing approval of the import and sale of up to 74,000 gas-powered on- and off-road motorcycles and all-terrain vehicles from China. The agency believes that it received either incomplete or falsified certification information.
EPA issued the vehicle certificates from 2006 to 2012 to two companies which operate as Snyder Technology, Inc. and Snyder Computer Systems, Inc. (doing business as Wildfire Motors Corporation). As a result of a lengthy investigation, the agency believes that the applications for the certificates contained misleading information and must be voided.
All vehicles imported into or manufactured in the United States are required to have certificates of conformity. Manufacturers or importers must submit an application to EPA that describes the vehicle and its emission control system. It must also provide emissions data demonstrating that the vehicle will meet federal emission standards for certain pollutants, including oxides of nitrogen (NOx), carbon monoxide (CO), and total hydrocarbons (HC)--all of which can harm public health and the environment. These pollutants can contribute to soot (fine particles) and smog (ground-level ozone), which are associated with asthma and heart attacks, increased emergency room visits and premature death.
In the cases of Snyder and Wildfire, EPA believes the manufacturers failed to accurately test the emissions from their own products, all of which were imported from China. Without proper emission controls, these vehicles can emit substantially more pollution than allowable under Clean Air Act standards.
EPA Voids Certificates Approving Import of Over 70,000 Small Recreational Vehicles
WASHINGTON -- The U.S. Environmental Protection Agency (EPA) announced today that it is withdrawing approval of the import and sale of up to 74,000 gas-powered on- and off-road motorcycles and all-terrain vehicles from China. The agency believes that it received either incomplete or falsified certification information.
EPA issued the vehicle certificates from 2006 to 2012 to two companies which operate as Snyder Technology, Inc. and Snyder Computer Systems, Inc. (doing business as Wildfire Motors Corporation). As a result of a lengthy investigation, the agency believes that the applications for the certificates contained misleading information and must be voided.
All vehicles imported into or manufactured in the United States are required to have certificates of conformity. Manufacturers or importers must submit an application to EPA that describes the vehicle and its emission control system. It must also provide emissions data demonstrating that the vehicle will meet federal emission standards for certain pollutants, including oxides of nitrogen (NOx), carbon monoxide (CO), and total hydrocarbons (HC)--all of which can harm public health and the environment. These pollutants can contribute to soot (fine particles) and smog (ground-level ozone), which are associated with asthma and heart attacks, increased emergency room visits and premature death.
In the cases of Snyder and Wildfire, EPA believes the manufacturers failed to accurately test the emissions from their own products, all of which were imported from China. Without proper emission controls, these vehicles can emit substantially more pollution than allowable under Clean Air Act standards.
Wednesday, April 3, 2013
COMMODITY POOL OPERATOR HAS REGISTRATIONS REVOKED IN FRAUD CASE
FROM: COMMODITY FUTURES TRADING COMMISSION,
April 2, 2013
CFTC Revokes Registrations of Gordon A. Driver and Axcess Fund Management, LLC
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the revocation of the registrations of Gordon A. Driver of Las Vegas, Nevada, and his company Axcess Fund Management, LLC (Axcess). Axcess was registered with the CFTC as a Commodity Pool Operator, and Driver was registered as an Associated Person of Axcess and listed as its sole principal.
On February 19, 2013, the CFTC Judgment Officer issued an Initial Decision on Default against Driver and Axcess finding that they were statutorily disqualified from CFTC registration based on an order of permanent injunction entered by the U.S. District Court for the Central District of California on July 12, 2012 (District Court’s Order) (see CFTC News Release 6304-12). The District Court’s Order enjoined Driver and Axcess from further violations of certain anti-fraud provisions of the Commodity Exchange Act (CEA) and permanently enjoined them from becoming registered with the CFTC or acting as a principal or agent of a registrant.
The CFTC’s Initial Decision on Default finds that the District Court’s Order demonstrates that Driver and Axcess are unfit to act as Commission registrants and constitutes a valid basis for revoking their registrations under the CEA.
In related cases, (1) on December 14, 2009 the U.S. Securities and Exchange Commission (SEC) obtained a permanent injunction against Driver and on September 22, 2011 an SEC Administrative Law Judge issued an Initial Decision barring Driver from the securities industry, including SEC registration, (2) on September 27, 2012, the Ontario Securities Commission (OSC) in Canada issued an order finding that Driver and Axcess had violated certain OSC anti-fraud provisions, and (3) on October 4, 2012, the U.S. Attorney’s Office for the Central District of California filed an indictment against Driver charging him with criminal fraud in connection with his operation of the commodity pool that was the subject of the CFTC civil action.
CFTC Division of Enforcement staff members responsible for this case are W. Derek Shakabpa, Judith M. Slowly, David Acevedo, Lenel Hickson, Jr., Stephen J. Obie, and Vincent McGonagle.
April 2, 2013
CFTC Revokes Registrations of Gordon A. Driver and Axcess Fund Management, LLC
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today announced the revocation of the registrations of Gordon A. Driver of Las Vegas, Nevada, and his company Axcess Fund Management, LLC (Axcess). Axcess was registered with the CFTC as a Commodity Pool Operator, and Driver was registered as an Associated Person of Axcess and listed as its sole principal.
On February 19, 2013, the CFTC Judgment Officer issued an Initial Decision on Default against Driver and Axcess finding that they were statutorily disqualified from CFTC registration based on an order of permanent injunction entered by the U.S. District Court for the Central District of California on July 12, 2012 (District Court’s Order) (see CFTC News Release 6304-12). The District Court’s Order enjoined Driver and Axcess from further violations of certain anti-fraud provisions of the Commodity Exchange Act (CEA) and permanently enjoined them from becoming registered with the CFTC or acting as a principal or agent of a registrant.
The CFTC’s Initial Decision on Default finds that the District Court’s Order demonstrates that Driver and Axcess are unfit to act as Commission registrants and constitutes a valid basis for revoking their registrations under the CEA.
In related cases, (1) on December 14, 2009 the U.S. Securities and Exchange Commission (SEC) obtained a permanent injunction against Driver and on September 22, 2011 an SEC Administrative Law Judge issued an Initial Decision barring Driver from the securities industry, including SEC registration, (2) on September 27, 2012, the Ontario Securities Commission (OSC) in Canada issued an order finding that Driver and Axcess had violated certain OSC anti-fraud provisions, and (3) on October 4, 2012, the U.S. Attorney’s Office for the Central District of California filed an indictment against Driver charging him with criminal fraud in connection with his operation of the commodity pool that was the subject of the CFTC civil action.
CFTC Division of Enforcement staff members responsible for this case are W. Derek Shakabpa, Judith M. Slowly, David Acevedo, Lenel Hickson, Jr., Stephen J. Obie, and Vincent McGonagle.
A JUDGE APPROVES SEC SETTLEMENT WITH SIGMA CAPITAL REGARDING ALLEGED ISIDER TRADING
FROM: U.S. SECRUITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today announced the court approval of settlements reached with the New York-based hedge fund advisory firm Sigma Capital Management in which Sigma Capital and two affiliates agreed to pay nearly $14 million to settle charges that the firm engaged in insider trading based on nonpublic information obtained through one of its analysts about the quarterly earnings of Dell and Nvidia Corporation. The settlements were approved by the Honorable Harold Baer of the United States District Court for the Southern District of New York on March 28, 2013.
The SEC’s case, borne out of its ongoing investigation into expert networks and the trading activities of hedge funds, began last year with charges against several hedge fund managers and analysts including Jon Horvath, a former analyst at Sigma Capital. Horvath agreed to a settlement in March 2013 in which he admitted liability.
In a complaint filed on March 15, 2013 along with the proposed settlements, the SEC charged Sigma Capital in the insider trading scheme and named two affiliated hedge funds - Sigma Capital Associates and S.A.C. Select Fund - as relief defendants that unjustly benefited from Sigma Capital’s violations. S.A.C. Select Fund is affiliated with S.A.C. Capital Advisors.
The SEC’s complaint alleged that Horvath provided Sigma Capital portfolio managers with nonpublic details about quarterly earnings at Dell and Nvidia after he learned them through a group of hedge fund analysts with whom he regularly communicated. Based on the confidential information, Sigma Capital traded Dell and Nvidia securities in advance of earnings announcements in 2008 and 2009 for $6.425 million in gains for its hedge fund affiliates.
Without admitting or denying the charges, Sigma Capital agreed to pay disgorgement of $6.425 million plus prejudgment interest of $1,094,161.92 and a penalty of $6.425 million. Sigma Capital is also permanently enjoined from future violations of the antifraud provisions of the federal securities laws.
According to the SEC’s complaint, the key inside information that Horvath obtained about upcoming earnings announcements by Dell and Nvidia often differed significantly from the predictions of market analysts, who only had access to publicly available information. Based on this inside information, Sigma Capital traded Dell and Nvidia securities in advance of four quarterly earnings announcements and reaped more than $5.2 million for its hedge fund Sigma Capital Associates. Horvath’s inside information also enabled S.A.C. Select Fund to execute trades and avoid losses of more than $1 million. The SEC’s complaint charged Sigma Capital with violating Section 17(a) of the Securities Act, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
The Securities and Exchange Commission today announced the court approval of settlements reached with the New York-based hedge fund advisory firm Sigma Capital Management in which Sigma Capital and two affiliates agreed to pay nearly $14 million to settle charges that the firm engaged in insider trading based on nonpublic information obtained through one of its analysts about the quarterly earnings of Dell and Nvidia Corporation. The settlements were approved by the Honorable Harold Baer of the United States District Court for the Southern District of New York on March 28, 2013.
The SEC’s case, borne out of its ongoing investigation into expert networks and the trading activities of hedge funds, began last year with charges against several hedge fund managers and analysts including Jon Horvath, a former analyst at Sigma Capital. Horvath agreed to a settlement in March 2013 in which he admitted liability.
In a complaint filed on March 15, 2013 along with the proposed settlements, the SEC charged Sigma Capital in the insider trading scheme and named two affiliated hedge funds - Sigma Capital Associates and S.A.C. Select Fund - as relief defendants that unjustly benefited from Sigma Capital’s violations. S.A.C. Select Fund is affiliated with S.A.C. Capital Advisors.
The SEC’s complaint alleged that Horvath provided Sigma Capital portfolio managers with nonpublic details about quarterly earnings at Dell and Nvidia after he learned them through a group of hedge fund analysts with whom he regularly communicated. Based on the confidential information, Sigma Capital traded Dell and Nvidia securities in advance of earnings announcements in 2008 and 2009 for $6.425 million in gains for its hedge fund affiliates.
Without admitting or denying the charges, Sigma Capital agreed to pay disgorgement of $6.425 million plus prejudgment interest of $1,094,161.92 and a penalty of $6.425 million. Sigma Capital is also permanently enjoined from future violations of the antifraud provisions of the federal securities laws.
According to the SEC’s complaint, the key inside information that Horvath obtained about upcoming earnings announcements by Dell and Nvidia often differed significantly from the predictions of market analysts, who only had access to publicly available information. Based on this inside information, Sigma Capital traded Dell and Nvidia securities in advance of four quarterly earnings announcements and reaped more than $5.2 million for its hedge fund Sigma Capital Associates. Horvath’s inside information also enabled S.A.C. Select Fund to execute trades and avoid losses of more than $1 million. The SEC’s complaint charged Sigma Capital with violating Section 17(a) of the Securities Act, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.
Monday, April 1, 2013
CHEMICAL COMPANY TO PAY $3 MILLION PENALTY FOR ALLEGED CLEAN AIR ACT VIOLATIONS
FROM: U.S. DEPARTMENT OF JUSTICE
Wednesday, March 27, 2013
Honeywell Resins and Chemicals to Pay $3 Million Penalty, Upgrade Air Pollution Controls at Hopewell, Virginia, Plant
Honeywell Resins and Chemicals LLC has agreed to pay a $3 million civil penalty for alleged Clean Air Act violations at its Hopewell, Va., plant, and improve the facility’s air pollution control equipment and processes, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.
The proposed consent decree resolves violations of federal and state air pollution regulations at the Hopewell plant, the world’s largest single-site producer of caprolactam used in the production of nylon, and ammonium sulfate used for fertilizer. According to EPA and the Virginia Department of Environmental Quality, the facility violated Clean Air Act limits on emissions of nitrogen oxide (NOx), benzene and other volatile organic compounds (VOCs) and particulate matter. The plant also allegedly failed to comply with requirements to upgrade air pollution control equipment, to detect and repair leaks of hazardous air pollutants, and to develop safeguards on benzene waste.
In addition to the $3 million civil penalty, Honeywell has agreed to reduce harmful air pollutants, install selective catalytic reduction at four production trains at the facility, conduct a third-party benzene waste operations audit, and implement an enhanced leak detection and repair program at the facility. Honeywell will also perform a mitigation project valued at approximately $1 million at the facility. The settlement reduces annual emissions of NOx by about 6,260 tons, and cuts annual emissions of benzene, other VOCs and hazardous air pollutants by 100 tons. The estimated cost for injunctive relief to address these emissions will be approximately $66 million dollars. The civil penalty will be split evenly between Virginia and the United States.
As part of the settlement, Honeywell did not admit liability for the violations, but has certified that it is now in compliance with applicable Clean Air Act regulations. The proposed consent decree is subject to a 30 day public comment period and final court approval.
Wednesday, March 27, 2013
Honeywell Resins and Chemicals to Pay $3 Million Penalty, Upgrade Air Pollution Controls at Hopewell, Virginia, Plant
Honeywell Resins and Chemicals LLC has agreed to pay a $3 million civil penalty for alleged Clean Air Act violations at its Hopewell, Va., plant, and improve the facility’s air pollution control equipment and processes, the Justice Department and the U.S. Environmental Protection Agency (EPA) announced today.
The proposed consent decree resolves violations of federal and state air pollution regulations at the Hopewell plant, the world’s largest single-site producer of caprolactam used in the production of nylon, and ammonium sulfate used for fertilizer. According to EPA and the Virginia Department of Environmental Quality, the facility violated Clean Air Act limits on emissions of nitrogen oxide (NOx), benzene and other volatile organic compounds (VOCs) and particulate matter. The plant also allegedly failed to comply with requirements to upgrade air pollution control equipment, to detect and repair leaks of hazardous air pollutants, and to develop safeguards on benzene waste.
In addition to the $3 million civil penalty, Honeywell has agreed to reduce harmful air pollutants, install selective catalytic reduction at four production trains at the facility, conduct a third-party benzene waste operations audit, and implement an enhanced leak detection and repair program at the facility. Honeywell will also perform a mitigation project valued at approximately $1 million at the facility. The settlement reduces annual emissions of NOx by about 6,260 tons, and cuts annual emissions of benzene, other VOCs and hazardous air pollutants by 100 tons. The estimated cost for injunctive relief to address these emissions will be approximately $66 million dollars. The civil penalty will be split evenly between Virginia and the United States.
As part of the settlement, Honeywell did not admit liability for the violations, but has certified that it is now in compliance with applicable Clean Air Act regulations. The proposed consent decree is subject to a 30 day public comment period and final court approval.
Sunday, March 31, 2013
COMPANY TO PAY MORE THAN $5.6 MILLION TO RESOLVE FALSE CLAIMS ALLEGATIONS
FROM: U.S. DEPARTMENT OF JUSTICE
Friday, March 29, 2013
CDW-Government to Pay U.S. $5,663,902 to Resolve False Claims Act Allegations
CDW-Government LLC (CDW-G) has agreed to pay $5.66 million to resolve allegations that it submitted false claims in connection with a U.S. General Services Administration (GSA) contract, the Justice Department announced today. CDW-G is a wholly-owned subsidiary of Illinois-based CDW Corporation and a reseller of information technology, equipment, services, office supplies and related products. The settlement resolves allegations that, during the period 1999 to 2011, CDW-G improperly charged government purchasers for shipping, sold products to the United States that were manufactured in China and other countries that are prohibited by the Trade Agreements Act, and underreported sales in order to avoid paying GSA its "Industrial Funding Fee," a fee based on total contract sales that is designed to cover GSA’s costs of contract administration.
"Protecting the federal procurement process is a top priority for the Department of Justice," said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division. "Contractors who abuse that process and undermine American trade interests will be held accountable for their actions."
"My office will not tolerate any abuse of the contracting process with the United States," said Stephen R. Wigginton, U.S. Attorney for the Southern District of Illinois. "My warning is both simple and certain: If you knowingly overcharge the United States, we will pursue all remedies available to us and we will recover the government’s losses."
The allegations arose from a lawsuit filed in a federal court in East Saint Louis, Ill., under the qui tam or whistleblower provisions of the False Claims Act. Those provisions allow private individuals known as "relators" to sue on behalf of the United States and to share in the proceeds of any settlement or judgment that may result. The relator in this case, former CDW-G sales representative Joe Liotine, will receive $1,336,098 of the total recovery as a statutory award. The relator may also be entitled to receive additional amounts from the defendant for attorneys’ fees and costs.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned U.S. ex rel. Joe Liotine, vs. CDW-Government, Inc., 05-cv-33-DRH-DGW. The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Southern District of Illinois and the GSA Office of Inspector General.
Friday, March 29, 2013
CDW-Government to Pay U.S. $5,663,902 to Resolve False Claims Act Allegations
CDW-Government LLC (CDW-G) has agreed to pay $5.66 million to resolve allegations that it submitted false claims in connection with a U.S. General Services Administration (GSA) contract, the Justice Department announced today. CDW-G is a wholly-owned subsidiary of Illinois-based CDW Corporation and a reseller of information technology, equipment, services, office supplies and related products. The settlement resolves allegations that, during the period 1999 to 2011, CDW-G improperly charged government purchasers for shipping, sold products to the United States that were manufactured in China and other countries that are prohibited by the Trade Agreements Act, and underreported sales in order to avoid paying GSA its "Industrial Funding Fee," a fee based on total contract sales that is designed to cover GSA’s costs of contract administration.
"Protecting the federal procurement process is a top priority for the Department of Justice," said Stuart F. Delery, Acting Assistant Attorney General for the Department of Justice’s Civil Division. "Contractors who abuse that process and undermine American trade interests will be held accountable for their actions."
"My office will not tolerate any abuse of the contracting process with the United States," said Stephen R. Wigginton, U.S. Attorney for the Southern District of Illinois. "My warning is both simple and certain: If you knowingly overcharge the United States, we will pursue all remedies available to us and we will recover the government’s losses."
The allegations arose from a lawsuit filed in a federal court in East Saint Louis, Ill., under the qui tam or whistleblower provisions of the False Claims Act. Those provisions allow private individuals known as "relators" to sue on behalf of the United States and to share in the proceeds of any settlement or judgment that may result. The relator in this case, former CDW-G sales representative Joe Liotine, will receive $1,336,098 of the total recovery as a statutory award. The relator may also be entitled to receive additional amounts from the defendant for attorneys’ fees and costs.
The claims settled by this agreement are allegations only, and there has been no determination of liability. The case is captioned U.S. ex rel. Joe Liotine, vs. CDW-Government, Inc., 05-cv-33-DRH-DGW. The settlement was the result of a coordinated effort by the Civil Division of the Department of Justice, the U.S. Attorney’s Office for the Southern District of Illinois and the GSA Office of Inspector General.
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