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Company To Pay Record $128 Million to Settle Contract Fraud Charge

NetApp Inc. has agreed to pay $128 million to settle accusations of overcharging on its GSA schedule contract.

It is the largest settlement ever involving the GSA schedules, according to the Washington law firm Ashcraft & Gerel, which brought the lawsuit on behalf of a whistleblower.

The Justice Department alleged the company had overcharged government buyers by falsely claiming it was offering most favored customer pricing, as required by its contract with GSA. NetApp, formerly Network Appliance Inc. of Sunnyvale, CA, did not admit any wrongdoing in the settlement.

NetApp provides data management hardware, software and solutions. According to court documents, a company employee, Igor Kapuscinski, told management that NetApp was not complying with the price reduction clause in its GSA contract. Kapuscinski said a superior threatened to demote him as a result of his complaint.

The Justice Department joined Kapuscinski’s lawsuit

Under terms of the federal whistleblower law, Kapuscinski stands to collect more than $19 million, 15% of the settlement.


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