IBM must face false claims case tied to first-responder gear
By Bloomberg
International Business Machines Corp. must face a whistle-blower lawsuit accusing it of being part of a $50 million scheme to overcharge the U.S., Illinois and the county that includes Chicago for communications gear used by first responders to disasters and terrorist attacks.
A Chicago federal judge on Thursday rejected the company’s request to dismiss the case filed in 2011 and unsealed in 2013 after the U.S. and Illinois declined to intervene.
IBM and other companies implicated in the suit had won a U.S. Department of Homeland Security-funded contract to provide emergency responders with inter-operable voice, video and data after the terrorist attacks of Sept. 11, 2001, according to the court’s ruling.
IBM allegedly hid from those paying for the work that some of those other businesses -- working as its subcontractors on the initiative known as Project Shield -- lacked the technical know-how to do the contracted work.
IBM paid those subcontractors anyway, brought in still more companies to do remedial work and then, aided by a Cook County employee, lied in its billing to obtain payment for them, according to Michael McGee, who filed the whistle-blower case.
Remedial Work
McGee worked for one of those companies brought in to do the remedial work, according to his complaint, claiming he learned of the wrongdoing when invited to participate in it.
U.S. District Judge Thomas M. Durkin ruled McGee had offered “competent proof” that he had “direct and independent knowledge” of the alleged transgressions and that those claims were sufficient to survive IBM’s dismissal motion.
The Armonk, New York-based company didn’t respond to an e- mail seeking comment on the ruling.
The case is U.S. ex rel. McGee v. IBM Corp., 11-cv-3482, U.S. District Court, Northern District of Illinois (Chicago).