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Tuesday, February 01, 2011
Oracle to Pay $46 Million to Resolve False Claims Act Allegations Against Sun Microsystems

Oracle has agreed to pay the United States $46 million to settle claims that Sun Microsystems, which merged with Oracle in 2010, submitted false claims and caused others to submit false claims to the General Services Administration (GSA) and other federal agencies, the U.S. Justice Department announced today.

This settlement resolves allegations under the False Claims Act (FCA) and Anti-Kickback Act that Sun knowingly paid kickbacks to systems integrator companies in return for recommendations that federal agencies purchase Sun's products, the department said in a statement.

"Sun executed agreements with consulting companies that provided for the payment of fees each time the companies influenced a government agency to purchase a Sun product," it said.

The settlement also resolves claims under the FCA that Sun's 1997 and 1999 GSA Schedule contracts were defectively priced because Sun provided incomplete and inaccurate information to GSA contracting officers during contract negotiations, as well as claims that the incomplete and inaccurate information resulted in defective pricing of Sun?s contract with the U.S. Postal Service and GSA Schedule contracts held by two resellers of Sun products.

"Kickbacks, illegal inducements, misrepresentations during contract negotiations - these undermine the integrity of the government procurement process and unnecessarily cost taxpayers money," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "As this case demonstrates, we will take action against those who abuse the public contracting process."

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