CDW-G pays $5.7M to settle False Claims Act allegations

CDW-Government LLC is paying $5.7 million to resolve false claims allegations involving a General Services Administration contract.

Between 1999 and 2011, CDW-G allegedly improperly charged for shipping, sold products to the government that were manufactured in China and other prohibited countries, and under-reported sales to avoid paying GSA industrial funding fee, the Justice Department said in March 29 statement.

The allegations against CDW-G were sparked by a whistle-blower lawsuit filed in Illinois under the False Claims Act by a former CDW-G salesman, Joe Liotine. With the settlement, he’ll receive $1.3 million.

“Protecting the federal procurement process is a top priority for the Department of Justice,” said Stuart F. Delery, acting assistant attorney general for the Department of Justice’s Civil Division, in a statement. “Contractors who abuse that process and undermine American trade interests will be held accountable for their actions.”

The claims in the settlement agreement are allegations only, the Justice Department said in its statement, and there has been no determination of liability.

The Washington Business Journal reported that CDW-G is not admitting wrongdoing, and settled the claim to avoid “additional time, inconvenience and expense.”

Just days prior to the announcement of the settlement, CDW-G’s parent, CDW Corp., filed for an initial public offering worth $500 million. No date was set for the IPO.

The proceeds will be used to pay off debt, terminate a management services agreement, and other general corporate purposes, according to the filing with the Securities and Exchange Commission.