Samsung to Settle False Claims for $2.3M; Whistleblower Award TBD

Samsung Electronics America Inc. has agreed to pay $2.3 million to resolve allegations that the company knowingly submitted or caused the submission of false claims for products sold on contracts, in violation of the Trade Agreements Act of 1979 (TAA), the U.S. Department of Justice announced earlier this week.

Multiple Award Schedule (MAS) contracts are awarded by General Service Administration (GSA) to multiple companies supplying comparable products and services.  Once GSA negotiates and awards the contract, any federal agency may purchase under it.  Like many other federal procurement contracts, GSA MAS contracts require the vendor to certify that all products it offers for sale comply with the TAA.  The TAA generally requires the United States to purchase products made in the United States, or another designated country with which the United States has a trade agreement. 

Samsung has authorized resellers who hold GSA MAS contracts.  Samsung certifies to the authorized resellers that Samsung will provide TAA compliant products and the resellers in turn list those products on the resellers’ GSA MAS contracts.  The settlement resolves allegations that Samsung caused resellers of its products to sell items on their GSA MAS contracts in violation of the TAA by knowingly providing inaccurate information to the resellers regarding the country of origin of the goods.  The United States alleges that Samsung represented to the resellers, who in turn represented to federal agencies, that the specified products were made in TAA designated countries, generally Korea or Mexico, when the specified products were in fact manufactured in China, which is not a TAA designated country.

The lawsuit was originally filed by Robert Simmons, a former Samsung employee, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  Simmons’ portion of the settlement has not yet been determined.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.