Government contractor to pay $5.7 in fraud case

Government contractor to pay $5.7 million to settle lawsuit over alleged fraud

Associated Press

EAST ST. LOUIS, Ill. (AP) -- A federal contractor has agreed to pay roughly $5.7 million to resolve a whistleblower's claims in an 8-year-old lawsuit that the company made money by submitting bogus claims, the Justice Department announced Friday.

The deal announced Friday does not include any admission of wrongdoing by CDW-Government LLC, a reseller of information technology, equipment, services, office supplies and related products.

The lawsuit, filed in 2005 in East St. Louis, alleged that from 1999 to 2011, CDW-Government under a General Services Administration contract improperly charged federal purchasers for shipping, illegally sold products to the U.S. that were made in China and other countries, and underreported sales to avoid paying certain fees.

"Protecting the federal procurement process is a top priority for the Department of Justice," Stuart Delery, the acting assistant attorney general for the Justice Department's civil division, said in a statement. "Contractors who abuse that process and undermine American trade interests will be held accountable for their actions."

Stephen Wigginton, the U.S. attorney for southern Illinois, said the case constituted a warning that "if you knowingly overcharge the United States, we will pursue all remedies available to us and we will recover the government's losses."

CDW-Government, in an emailed statement Friday to The Associated Press, said it denies the basis of the claim and chose to settle the matter to avoid additional time, inconvenience and costs associated with the already lengthy litigation.

"CDW-G takes pride in its best-in-class contracting practices and procedures, which have been audited and approved by the government on numerous occasions," the company said. "We are committed to our customers and want to assure them that this settlement does not in any way affect our ability to provide the same outstanding service that we always have provided."

The Justice Department said the whistleblower — former CDW-Government sales representative Joe Liotine — will get roughly $1.34 million permitted under statute, as well as potentially more for his attorneys' fees and costs.

CDW-Government is a subsidiary of Vernon Hills-based CDW Corp., a privately-held company seeking a return to being publicly traded.

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