Oracle pays $8 million to settle qui tam case brought under False Claims Act by whistleblower

May 13, 2005-- Oracle Corp. has agreed to pay $8 million to the federal government to settle a “qui tam” lawsuit brought by Phillips & Cohen LLP on behalf of a whistleblower.

The qui tam lawsuit, which the Department of Justice joined, said Oracle violated the False Claims Act by overbilling numerous federal agencies for software training services from 1997 to 2003.

The qui tam case had been under seal, meaning it wasn’t known to the public, until today when the U.S. attorney’s office in Boston announced it had reached a settlement with Oracle.

Qui tam lawsuit alleged billing fraud by Oracle

Oracle’s training division, Oracle University, billed federal agencies in advance for computer software training, creating internal accounts from which it deducted the training costs for agency employees. Oracle did this even though its contract with the government stated that the government would pay for software training only after it had been done.

After 12 months, Oracle would declare an account “expired” – without informing the government -- and keep any unused funds, according to the qui tam lawsuit. This cost the government millions.

The U.S. attorney’s office also said that Oracle had overcharged the government for the travel expenses of its instructors for the computer software training. Federal regulations limit travel expenses to the government-set per diem and stipulate that only the actual amount spent on expenses may be reimbursed.

The qui tam lawsuit was filed in 2003 in federal district court in Boston by a former vice president of sales for Oracle University. He will receive nearly 20 percent of the settlement for his contributions to the case and the work of his attorneys, Phillips & Cohen. Under the False Claims Act, whistleblowers are awarded 15 percent to 25 percent of the amount the government recovers as a result of their qui tam lawsuits.

Phillips & Cohen is the nation’s most successful law firm representing whistleblowers in qui tam lawsuits. For more information about Phillips & Cohen's record, see P&C's Successful Whistleblower Cases.