Calnet pays $18.1 million to settle False Claims Act suit brought by whistleblowing former employee

by Ben Vernia | June 2nd, 2012

On June 1, the Department of Justice announced that defense contractor Calnet, Inc., has settled False Claims Act allegations brought in a qui tam suit by a former employee. According to DOJ’s press release:

Calnet Inc. has agreed to pay the United States $18.1 million to resolve allegations that the company submitted false claims to the Department of Defense, the Justice Department announced today. Calnet Inc., an intelligence analysis, information technology and language services company, is headquartered in Reston, Virginia.

The settlement with Calnet relates to three contracts under which the company supported the United States’ war effort by providing translation and linguist services at Guantanamo Bay and several other facilities beginning in 2005. Calnet was a subcontractor on one of the contracts, and the prime contractor on the other two contracts. The United States alleged that Calnet overstated its provisional indirect or overhead rates on each of these contracts and thus submitted inflated claims for payment to the United States.

The relator will be paid $2,669,724. (The 14.7% relator’s share is below the statutory range of 15-25%, suggesting that at least some of the $18.1 million settlement relates to conduct outside of the whistleblower’s suit.)

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