ACS settles federal fraud case

Affiliated Computer Services Inc. (ACS) agreed to pay the federal government $2.6 million to resolve allegations that it had submitted inflated charges for services it provided via programs run by and through the Agriculture, Labor, and Health and Human Services Departments, according to the Justice Department.

The settlement came following an investigation of civil fraud allegations under the False Claims Act, also known as the "qui tam" law.

ACS voluntarily told the government that it had submitted inflated claims to a local agency that delivered services to workers using funds provided by the three federal departments, according to Justice and the company.

The company worked closely with Justice to investigate the matter, according to both sides. The vendor said it fired four employees after detecting misconduct that related to the overbilling.

The civil fraud allegations centered around ACS' work on behalf of the Dallas County Local Workforce Development Board Inc., according to a Justice statement that provided the case details.

The board, which operates workforce development centers, received funds provided by the three federal departments via the Texas Workforce Commission to enroll citizens in various programs. ACS provided enrollment services and received compensation?including profit and incentive payments?based on the number of clients enrolled.

ACS said misconduct by several former employees had inflated the payments it received from the board.

"ACS cooperated fully with the government's investigation, and based on information learned during the investigation and from ACS, the U.S. alleged ACS was paid federal funds for inflated or otherwise improper profit and incentive-related information between 2002 and 2005," the Justice statement said.

According to an ACS statement, "After an internal investigation revealed that employees in our Dallas workforce program were not upholding our high standards on this contract ,we immediately notified the authorities."

ACS said it was pleased with the resulting settlement, which it called fair. The vendor added that the county workforce board had agreed to pay $539,472 as the final payment for the 2005 contract year.

The inspectors general offices of the three departments worked with the workforce commission and the U.S attorney for the Northern District of Texas to investigate and resolve the ACS matter.

Qui tam investigations can lead to the award of treble damages to persons who alert the government about fraud schemes. Justice has mounted several successful investigations and prosecutions of the False Claims Act cases related to computing and telecommunications programs.