Verizon has agreed to pay $93.5 million to resolve allegations that it systematically overcharged the government for voice and data services beyond their fixed contracts. The whistleblower case had been under seal until the recent announcement of the government intervention and settlement.
“Verizon was not only charging the government for the costs associated with communication services, but it also was pumping up its revenues by charging the government for Verizon’s own property taxes and other costs of doing business,” said Colette Matzzie, a Washington, DC, attorney with Phillips & Cohen LLP, which represents the whistleblower. “Under federal law, Verizon was responsible for paying those costs, not the government.
“Corporations that contract to provide services to federal, state and local governments must play by the rules,” said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. “We will protect taxpayers against those who seek to charge more than they deserve.”
Under the False Claims Act, relators in successful whistleblower actions are entitled to 15 to 25% of funds recovered, if the government joins the case.