The Oracle Corp., whose CEO Larry Ellison is one of the world?s richest men, agreed Tuesday to pay $98.5 million to the U.S. government to settle a false claims lawsuit, after a company it owns was accused of ripping off the government in a contract.
This is the largest contract fraud settlement ever reached by the U.S. government in Maryland.
“I am proud that Maryland is part of this national initiative,” said Maryland U.S. Attorney Rod Rosenstein, who was among several federal officials who announced the settlement Tuesday.
PeopleSoft, a company that merged with Oracle last year, entered into a federal contract in March 1997 to sell software products and maintenance services. The contract resulted in about $127 million of software sales and $77 million in maintenance sales until it ended in 2005, Rosenstein said.
But government officials learned the company might have been ripping them off after a former PeopleSoft employee James A. Hicks filed suit against his old bosses under the federal False Claims Act.
Hicks? suit alleged PeopleSoft misrepresented its software discounting practices to the government when negotiating its contract ? and did not reveal that it offered lower prices to customers who purchased in bulk, causing the government to pay higher amounts of taxpayer money than necessary, officials said.
To settle the claims, Oracle agreed Tuesday to pay the U.S. government $98.5 million and Hicks $17.7 million within the next two weeks.
PeopleSoft?s federal sales office was in the Bethesda. It merged into Oracle in March 2005.
According to the settlement, Oracle continues to deny that it?s liable for the claims alleged in the suit. A Oracle spokeswoman did not immediately respond to a request for comment.
