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Oracle Headquarters. REUTERS/Robert Galbraith

Oracle to pay $46 million in false claims case - U.S.

1/31/2011 COMMENTS (0)

WASHINGTON, Jan 31 (Reuters Legal) - Oracle Corp agreed to pay $46 million to settle claims that Sun Microsystems Inc, which it bought last year, submitted false claims to federal government agencies and paid kickbacks, the Justice Department said on Monday.

It said the settlement resolved allegations that Sun knowingly paid kickbacks to systems integrator companies in return for recommendations that federal agencies buy Sun's products.

The department said the allegations were part of a larger, ongoing investigation of government technology vendors that has resulted in settlements with six other companies.

The settlement resolves claims that Sun's contracts in the late 1990s with the General Services Administration were defectively priced because it provided incomplete, inaccurate information during contract negotiations.

The department said the U.S. Postal Service later relied on the defective pricing information during contract negotiations with Sun.

The allegations that Sun improperly paid kickbacks first were first made by whisteblowers who filed a qui tam lawsuit in Arkansas in 2004. The federal government later joined the suit and added new claims.

Case: Rille et al v. Electronic Data et al, U.S. District Court for the Eastern District of Arkansas, No. 4:04-cv-00986.

For the plaintiffs: Craig Johnson of Packard, Packard & Johnson and others.

For the defendant: Clayton James, Phillip Metcalf and Stuart Altman of Hogan Lovells; Michelle Kaemmerling and John Lile III of Wright, Lindsey & Jennings.

(Reporting by James Vicini of Reuters; Additional reporting by Jeff Roberts of Reuters Legal)


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