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Packard Bell NEC settles whistleblower suit

$3.5 million paid to end 'old parts for new' case

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Packard Bell NEC has paid the US government $3.5 million to settle the 'whistleblower' suit brought by the Attorney General over allegations that the company sold computers containing old parts as new. The settlement is $1 million more than the company has already paid out in previous settlements in related suits. Former Packard Bell employee Abraham Gale claimed systems sold to the US military for resale to individual personnel were assembled from parts returned to the company from its retail customers. Packard Bell's contract with the US Naval Exchange Commission required the company to sell it completely new computers. The US government took over the case under the False Claims Act, which -- nicely, for Gale -- includes a provision for paying whistleblowers a share of recovered damages as reward for bringing the misdeeds to light. As yet, the Attorney General's office has not revealed whether Gale will receive a reward payment or how large that payment might be. Packard Bell ended the practice of including old parts in so-called new systems in 1995 (long before NEC took a controlling stake in the company) after settling a number of suits from consumers. The Attorney General's suit covers a period of six years up to that 1995 settlement. ® Click for more stories

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