Feeds

Oracle sued for alleged fraud against US gov

'Ten of millions of dollars in overcharges'

Build a business case: developing custom apps

The US Justice Department has sued Oracle, claiming the software giant overcharged the federal government by "tens of millions of dollars".

The complaint against Oracle was originally filed by an Oracle employee, who alleged that large discounts offered to other customers were hidden from government agencies. Paul Frascella — who no longer works for Oracle — accused his employer of a "scheme...to defraud the United States government by failing to disclose deep discounts offered to commercial customers".

According to court documents filed with the US District Court for the Eastern District of Virginia, Oracle was required — under General Service Administration (GSA) Multiple Award Schedule (MAS) contracts — to offer the government the "best price given to the most favored customer". These MAS contracts allow government agencies to purchase goods from a common catalog without renegotiating with the vendor.

Frascella filed his complaint in May 2007 under the False Claims Act, which allows employees to blow the whistle when they believe their company has defrauded the government, and the Department of Justice joined the complaint in April of this year. When the DoJ joined, the court papers were unsealed.

In 1997, Frascella joined Oracle as a contract specialist in its commercial sales department, and though the company trained him not to offer commercial discounts beyond what was offered to government under "GSA rules", according to the court papers, it later instituted various schemes to avoid these restrictions. Among other things, Frascella alleges, Oracle would sell software to a reseller and the reseller would then sell it to the customer at a price well below the GSA minimum. ®

Bridging the IT gap between rising business demands and ageing tools

More from The Register

next story
NO MORE ALL CAPS and other pleasures of Visual Studio 14
Unpicking a packed preview that breaks down ASP.NET
Cheer up, Nokia fans. It can start making mobes again in 18 months
The real winner of the Nokia sale is *drumroll* ... Nokia
Mozilla fixes CRITICAL security holes in Firefox, urges v31 upgrade
Misc memory hazards 'could be exploited' - and guess what, one's a Javascript vuln
Put down that Oracle database patch: It could cost $23,000 per CPU
On-by-default INMEMORY tech a boon for developers ... as long as they can afford it
Google shows off new Chrome OS look
Athena springs full-grown from Chromium project's head
Apple: We'll unleash OS X Yosemite beta on the MASSES on 24 July
Starting today, regular fanbois will be guinea pigs, it tells Reg
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.