Department of Justice Reaches False Claims Act Settlement Based on Whistleblower Tip
On December 3, the Department of Justice announced that it had entered into a settlement with Workrite Ergonomics, LLC, a Delaware company, and its parent, Knape & Vogt Manufacturing Co. related to claims brought by a False Claims Act whistleblower.
Michael Franchek—a former sales manager for Workrite—sued the company under the False Claims Act, which allows whistleblowers to sue companies for false claims made to the government and to share in any recovery. The lawsuit alleged that Workrite had overbilled the government for ergonomic furniture purchased through the General Service Administration's Multiple Award Schedule (MAS) program, which provides the government with a streamlined process to procure commonly used commercial goods and services. Workrite allegedly lied about its prices during contract negotiations with the government and then failed to give the government lower prices that it offered to other customers, as required by the contract. In short, it ripped the government off, charging them more than commercial customers.
“Federal contractors must be honest and forthcoming,” said U.S. Attorney David L. Anderson of the Northern District of California. “Contractors that overcharge the American taxpayer will be held accountable.”
The False Claims Act provides that whistleblowers receive between 10% to 30% of the money the government recovers from the wrongdoer. In this case, Mr. Franchek was awarded approximately $1.27 million for stepping up and doing the right thing.
If You See Corporate Fraud, Talk to An Experienced Employment Attorney
Whistleblowers like Mr. Franchek are critical to our system of law enforcement and to stopping corporate fraud. Our experienced whistleblower attorneys can help you navigate False Claims Act cases and other complex whistleblower laws.