CA Technologies to pay $11M to settle overbilling suits
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CA Technologies, the Islandia-based computer giant, agreed Tuesday to pay $11 million to settle civil lawsuits alleging the corporation "improperly" overcharged numerous federal, state and local government departments by deceptively boosting the price of its software and software maintenance contracts, according to officials.
The alleged victims stretched from New York to Hawaii, Defense Department to the Manhattan district attorney's office to the East Williston School District, officials of the U.S. Justice Department and New York State attorney general's office said in statements.
The settlement covered federal and New York State civil lawsuits and legal actions involving the attorney-general offices in seven other states and the District of Columbia.
"The United States is not a deep pocket of taxpayer dollars to be exploited by private industry," Eastern District U.S. Attorney Loretta Lynch said in a statement.
In settling the suits, CA denied any wrongdoing.
"Years ago, we corrected systems shortcomings that were discovered in the course of this seven-year-old case," the company said in a statement. "These agencies are and remain valued customers of CA Technologies."
Shares of CA rose 4 cents Tuesday to close at $32.13.
Officials said one way CA overcharged government customers was by double billing for maintenance contracts on software.
Officials also said CA sales staff working with the Pentagon ignored that the federal government had paid for software contracts in bulk at steep discounts, and convinced military purchasers to buy more expensive contracts.
Government officials piggybacked their lawsuits on one originally brought in 2006 in federal court in Central Islip by Ann-Marie Shaw, a Florida woman who had worked at CA from 2003 to 2006 in the department that sold software to the federal government, according to her attorneys.
As the whistle-blower in the case, Shaw will get $1.6 million as part of the settlement, court documents say.
In a statement issued by her attorney, Janet Goldstein, Shaw said, "I was appalled to learn what CA was doing. I alerted my CA managers to the situation, hoping that CA would stop these practices. My concerns fell on deaf ears."
Goldstein said of her client's actions that the scheme "likely would have continued for many more years if not for her."