CA Technologies to Pay $11 Million to Settle False Claims Act Charges

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On November 12, 2013, the United States Department of Justice announced that CA Technologies (formerly CA, Inc.) will pay the federal government $8 million to settle whistleblower allegations that the company violated the federal False Claims Act by double-billing federal agencies for software maintenance services and preventing Department of Defense customers from utilizing pre-paid software inventory and discounts by directing the customers to purchase more expensive products. The settlement resolves a lawsuit filed by Ann-Marie Shaw, a former CA Technologies employee, in the Eastern District of New York, titled United States of America, and the States of California, Florida, Hawaii, Illinois, Massachusetts, Nevada, Virginia, New York, the District of Columbia, and the State and City of New York ex. rel. Anne-Marie Shaw v. CA, Inc., Civil Action No. 06-3552 (LDW) (WDW) (E.D.N.Y). The lawsuit alleged that CA Technologies asked federal and state customers to renew their software maintenance agreements with CA Technologies several months before the agreements expired. CA Technologies would then allegedly date the renewal as of the date it processed the renewal order, rather than at the end of the current maintenance agreement, thereby double-charging customers for its maintenance services. The Department of Justice’s press release is available here (http://www.justice.gov/usao/nye/pr/2013/2013nov12b.html).

CA Technologies also entered into separate settlement agreements totaling $3 million to resolve claims by California, Florida, Hawaii, Illinois, Massachusetts, Nevada, Virginia, New York, the District of Columbia, and the City of New York arising out of related allegations under state and local false claims statutes.