Oracle To Pay $199.5M To Settle U.S. False Claims Case

[dedanna1029]

By Brent Kendall
Of DOW JONES NEWSWIRES


WASHINGTON (Dow Jones)--Oracle Corp. (ORCL) will pay $199.5 million to settle U.S. false-claims allegations that it defrauded the federal government on a software contract that involved hundreds of millions of dollars in sales, the Justice Department announced Thursday.

The department had alleged that Oracle misrepresented its commercial sales practices, causing government customers to receive deals that were inferior to those Oracle gave its commercial customers. The department also alleged that Oracle went out of its way to hide those deals from the government.

A former Oracle employee, Paul Frascella, originally raised the allegations in a suit against the company under the False Claims Act, which provides financial rewards to private litigants who report fraud against the government. That suit was filed in 2007 but kept under seal until 2010, when the government said it would join the litigation.

The case has its origins in a contract Oracle signed in 1998 with the U.S. General Services Administration, which negotiates contracts for the government.

Oracle vigorously denied the allegations, saying in a statement, "Oracle never committed any fraud whatsoever."

The company said it settled "to avoid the distraction and high cost of litigating this case."

-By Brent Kendall, Dow Jones Newswires; 202-862-9222; brent.kendall@dowjones.com

[viking60]

Sounds like someone made a bad deal and regretted it. Getting 119.4 M back probably made it a good deal. I cannot see how private companies making a better deal is illegal.
But if the gap gets to big someone is going to feel like idiots. I guess the authorities just used their market force here. A huge customer is always right......

[R_Head]

Well, MS does it all the time and nobody bitches about it.

[viking60]

Yes that is the inherited monopoly arrogance.
Would you believe they actually threatened The US government that they would not cooperate with them. That was a big mistake, but they know very well that most systems have their OS as an important factor.
Faced with this reaction every sensible person on the planet will start looking for alternatives. So MS must have been pretty confident that there are none.
I don't think they are that confident anymore.
I still think this program is illegal, and way beyond what Oracle has done here.