Feeds

Uncle Sam sues Oracle (again) for alleged fraud

DoJ doubles down on whistleblower suit

Intelligent flash storage arrays

The US Department of Justice has filed a fresh lawsuit against Oracle, three months after intervening in a whistleblower suit that accuses the software giant of overcharging the government by "tens of millions of dollars."

Paul Frascella, formerly senior director of contract services at Oracle, filed the original lawsuit back in 2007, alleging that Oracle did not give the US government the same levels of discounts it did for commercial customers, something that's required by the General Services Administration, which does contract processing for US government agencies. In essence, if Oracle provides discounts for commercial customers, it's required to automatically update its GSA pricing schedules and discount levels so the government receives the same discount. Frascella left Oracle in late 2008.

The DOJ joined Frascella's lawsuit in April, and it has now filed its own complaint against Oracle under the False Claims Act. It alleges that Oracle defrauded the US government on software contracts that were in effect from 1998 to 2006 involving hundreds of millions of dollars in revenues for Oracle. You can see the DOJ's amended complaint here, which was filed today in the US District Court for the Eastern District of Virginia. The government is alleging breach of contract, fraud in the inducement, fraud by omission, payment by mistake, and unjust enrichment on the part of Oracle. It's seeking treble damages because it believes Oracle willingly undertook the fraud.

In a nutshell, the suit alleges that Oracle told the GSA that typical commercial customers received discounts ranging from 20 to 40 per cent if they bought between $650,000 and $5m in goods and services, that Oracle's discounting was much deeper than that. It also alleges that Oracle did not, as it told the government, stick to a very precise discounting schedule for commercial accounts except for "national and large accounts" that represented only 5 per cent of its business and that had discounts ranging from 40 to 70 per cent, depending on the deal.

According to the lawsuit filed by the DOJ, Oracle went through lots of contortions to try to avoid triggering amendments to the GSA as it did deals, including pushing deals through resellers, selling term licenses, making them limited use, and compelling customers with deep discounts on small deals more than $200,000 to keep them compliant with the GSA schedule.

"We take seriously allegations that a government contractor has dealt dishonestly with the United States," said Tony West, assistant attorney general for the Civil Division of the Department of Justice in a statement. "When contractors misrepresent their business practices to the government, taxpayers suffer." ®

Internet Security Threat Report 2014

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Big Content outs piracy hotbeds: São Paulo, Beijing ... TORONTO?
MPAA calls Canadians a bunch of bootlegging movie thieves
Google Glassholes are UNDATEABLE – HP exec
You need an emotional connection, says touchy-feely MD... We can do that
Lawyers mobilise angry mob against Apple over alleged 2011 Macbook Pro crapness
We suffered 'random bouts of graphical distortion' - fanbois
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
US court SHUTS DOWN 'scammers posing as Microsoft, Facebook support staff'
Netizens allegedly duped into paying for bogus tech advice
Feds seek potential 'second Snowden' gov doc leaker – report
Hang on, Ed wasn't here when we compiled THIS document
prev story

Whitepapers

Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Website security in corporate America
Find out how you rank among other IT managers testing your website's vulnerabilities.