Samsung to Pay $2.3 Million to Resolve Whistleblower False Claims Allegations on Government Contracts By Tod Aronovitz | 08/26/14 | 0 Comment

Ridgefield Park, New Jersey-based Samsung Electronics America Inc. has agreed to a $2.3 million settlement to resolve accusations that it provided inaccurate information on some of its products sold on government contracts, the Justice Department announced.

Former Samsung employee Robert Simmons, the “relator,” originally made the whistleblower false claims allegations in a lawsuit filed under the False Claims Act whistleblower provisions. Mr. Simmons’ whistleblower reward, which will be a share of the settlement, is still being determined.

The products in question were sold on General Service Administration (GSA) Multiple Award Schedule (MAS) contracts. It was alleged that the electronics distributor and marketer caused the submission of false claims in violation of the Trade Agreements Act of 1979 (TAA), according to the Justice Department.

MAS contracts are awarded by GSA to a variety of companies that supply comparable products and services. Once GSA negotiates and awards a contract, any federal agency may purchase under it as long as the vendor certifies all of its products comply with the TAA. Typically, this means the United States may purchase products made in the U.S. or another designated country with which our country has a trade agreement.

Samsung exemplifies how these contracts work. The electronics distributor and marketer has authorized resellers who hold GSA MAS contracts. Samsung then certifies to the authorized resellers that it will provide TAA compliant products. The resellers, in turn, list those products on the resellers’ GSA MAS contracts.

In this whistleblower false claims case, the settlement resolves allegations that from January 2005 through August 2013, Samsung knowingly provided inaccurate information to the resellers in regards to the country of origin of the goods. The federal government alleged that Samsung represented to its resellers, who in turn represented to federal agencies, that certain products were made in Korea or Mexico (approved TAA countries) when they were actually produced in China, not a TAA designated country.

“It is unacceptable to sell unauthorized foreign electronics to the United States,” said GSA Acting Inspector General Robert C. Erickson. “We expect all companies doing business with the federal government to comply with contracting laws.”

The investigation and settlement were the result of a coordinated effort among the U.S. Attorney’s Office for the District of Maryland, the Commercial Litigation Branch of the Justice Department’s Civil Division and the GSA’s Office of Inspector General. The case is United States ex rel. Simmons v. Samsung Electronics America, Inc. et al., No. AW-11-2971 (D. Md.).

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The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with whistleblowers to document whistleblower false claims allegations and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss your case.