There’s no doubt that the United States government owes a big debt of gratitude to Norman Rille and Neal Roberts, a pair of onetime accounting execs who blew the whistle on kickback and overbilling schemes in the bidding for Government Services Association contracts. In all, the Justice Department has reaped almost $200 million in settlements with defendants in False Claims Act cases that Rille and Roberts -- and their longtime lawyers from Packard, Packard & Johnson -- have filed in U.S. District Court in Little Rock over the last seven years. Most recently, Cisco agreed to cough up $48 million in September 2010; DOJ’s biggest recovery in a Rille and Roberts case was $87.5 million EMC Corporation paid in May 2010.
But there are apparently limits to the government’s goodwill. Last August, Hewlett-Packard settled a False Claims Act case initiated by Rille and Roberts for $55 million, $9 million for kickbacks and $46 million for overbilling. The DOJ news release on the deal didn’t specify what the whistleblowers’ share of the proceeds would be, which was a little odd because that’s usually included in FCA announcements. This winter we found out why: The Justice Department filed a motion on Jan. 27 contending that Rille and Roberts aren’t entitled to any of the $46 million overbilling portions of the H-P deal, and only 15 percent (the statutory minimum) of the kickback settlement. The whistleblowers, according to the government’s brief, hadn’t supplied the feds with more than broad outlines of H-P’s alleged conduct, so they didn’t deserve more than a small slice of the proceeds. (The whistleblowers’ lawyers took a rather different view, requesting 25 percent of the entire $55 million.)
The judge overseeing the case, U.S. District Judge Billy Roy Wilson, concluded on March 18 that Rille and Reynolds should receive a percentage of both parts of the settlement, for a total of $8.8 million. “Relators and their counsel were fully cooperative with the government and provided substantial assistance at the beginning stages of this case,” the judge wrote. “The government had no knowledge of the (overbilling) before relators brought it to light.”
End of story, right? Wrong. On Wednesday, the Justice Department filed a notice that it is appealing Wilson’s award to Rille and Reynolds.
The whistleblowers, meanwhile, have brought in Ryan Mauch of Jeffer Mangels Butler & Mitchell, who’s handling what the docket suggests is a dispute between the whistleblowers and Packard, Packard & Johnson. Unfortunately, the filings are sealed and neither Mauch nor Don, Ron, or Lon Packard returned calls for comment.
(Reporting by Alison Frankel)