July 30, 2010 – The U.S. Justice Department said on Thursday that it has filed a complaint against Oracle, accusing the company of defrauding the federal government on a software contract.
The DoJ brought the complaint under the False Claims Act. In its lawsuit, the government alleges Oracle misrepresented its commercial sales practices in regards to a General Services Administration software contract, causing government customers to receive deals that were inferior to those Oracle gave to its private-sector clients. The government says the GSA contract was worth hundreds of millions of dollars between 1998 and 2006.
Oracle was not immediately available to comment on the lawsuit.
"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," DoJ officials said in a statement. "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."
This case was investigated as part of a National Procurement Fraud Initiative.
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