EMC Corporation Agrees To Pay $87.5 Million To Settle Lawsuit Alleging That It Violated The False Claims And Federal Anti-Kickback Acts

On May 25, 2010, the U.S. Department of Justice announced that it had entered into a settlement agreement with the Massachusetts-based information technology company EMC Corporation in which the company agreed to pay $87.5 million to settle a lawsuit alleging that it violated the False Claims Act and the Federal Anti-Kickback Act.  According to the lawsuit, EMC violated the False Claims Act by fraudulently inducing the General Services Administration (GSA) to enter into a contract by falsely representing to the GSA that the company would conduct a price comparison to guarantee that for a given purchase, the government would receive a purchase price equal to the lowest price that the company offered to its commercial customers for a comparable purchase.  EMC allegedly knew that it was not capable of conducting such price comparison at the time it was negotiating this contract with the GSA.  The government also alleged that EMC engaged in an illegal kickback scheme by paying consulting companies fees each time the companies recommended that a government agency purchase an EMC product.

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