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Two companies pay for overcharging government for phone systems

By Phillips & Cohen LLP

Two companies have paid over $16.5 million to resolve whistleblower allegations that they systematically overcharged the US government for desktop telephone services.

Avaya Inc. paid over $13 million to resolve the fraud allegations brought by two former managers of the company that became aware of the illegal scheme. The lawsuit alleges that beginning in the mid 1990s and until as recently as 2006, the company was charging state and federal offices for services that were dysfunctional or non-existent.

The second company, CIT Group, Inc., paid over $3 million to resolve allegation that, after purchasing a portion of Avaya?s customer base, CIT continued the fraudulent billing scheme.

The qui tam case was brought under the False Claims Act by two whistleblowers in 2004. The whistleblowers will receive approximately $3.3 million.

Full post as published by False Claims Act - Qui Tam on March 08, 2011 (boomark / email).