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Sterling Employment Law

Wireless carriers settle False Claims Act whistleblower lawsuit

Nearly 300 government entities in one state ranging from agencies and municipalities to school districts and hospitals understandably thought they were getting a great deal from their wireless carriers.

Here’s why, as noted in a recent media article: Industry principals Verizon and AT&T contractually promised that the entities’ status as preferred customers ensured them “the lowest cost available among dozens of plan options. Moreover, the carriers vowed to benefit them additionally through “optimized rate plans” based on high usage.

Material benefits unquestionably accrued resulting from the contracts, but far from what was expected from the consumers’ perspective.

In fact, the two companies reportedly engaged for years in a scheme to systematically overcharge the government actors. Their reported fraudulent behavior was initially brought to light back in 2012 via a whistleblower action filed in California.

The case finally settled last week, with one commentator stressing that its outcome was a proper response to the carriers’
“shocking” behavior steeped in public fraud. Verizon and AT&T were together slapped with a $116 million penalty. The outcome spelled the second-largest recovery ever in California for a U.S. False Claims Act whistleblower lawsuit not germane to the medical realm.

The whistleblower – a founder of one wireless company – provided the government with essential information spotlighting the fraud and its magnitude. He was strongly retaliated against, reportedly being “blackballed from the industry.” His input was deemed crucially important by the government, and he was awarded nearly $48 million of the settlement for the vital role he played in the outcome.

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