Government Contracts Monitor

Failure to Credit Rebates and Discounts? False Claims Act Violation

August 24, 2015

PC Specialists Inc. d/b/a Technology Integration Group (TIG), will pay $5.9 million to settle civil allegations that the company inflated the price of computers sold through another company to the National Nuclear Security Administration (NNSA). TIG buys computers and other technology products for resale.

For 10 years – from 2003 to 2013 – TIG sold Dell computers to Sandia Corporation for resale to the United States under Sandia’s contract with the NNSA. TIG knowingly inflated the amounts it charged Sandia by failing to give credits for rebates and discounts it received from Dell as required by its contract, resulting in false claims to the government for the inflated prices.

Just a few months ago, in a separate but related criminal matter, TIG entered into a non-prosecution agreement with the U.S. Attorney’s Office regarding allegations that TIG employees engaged in a scheme to defraud the United States by inflating the amounts it charged Sandia for computers. Under the non-pros agreement TIG paid $4.6 million in restitution and was required to terminate the employment of a vice president, a senior account executive and an accounts executive – all of whom participated in and profited from the overcharging scheme.

The civil settlement announced last week arose from a lawsuit filed by a former TIG executive under the qui tam, or whistleblower, provisions of the False Claims Act, captioned United States ex rel. Granger v. PC Specialists, Inc. d/b/a/ Technology Integration Group, No. 14-cv-00633 (D.N.M.).

Attorneys

Lindsay Simmons