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Personal Injury Blog

  • $6 Million Award to Whistleblower for Reporting Fraudulent Security Clearance Background Checks

    Posted By Chaikin, Sherman, Cammarata & Siegel, P.C. || 13-Jan-2016

    By: Allan M. Siegel

    The government recently awarded a whistleblower $6 million for reporting his employer for providing deficient security background checks for federal agencies. Blake Percival was working for USIS, the government’s largest supplier of security clearance background checks, when he refused to condone an alleged internal company practice known as “dumping” or “flushing.” This fraudulent practice involved certifying background investigations as complete to the Office of Personnel Management, when the background investigation was partially or totally unfinished. USIS employees told Percival, who was a USIS manager in a Pennsylvania office, that cases were not getting reviewed because the company was setting unreachable performance targets. When some background checks were partly or totally incomplete, the files were certified to the federal government as complete so that USIS could meet incentivized performance targets.

    DC Whistleblower LawyerThis practice was called “dumping” or “flushing” files by USIS. Percival insisted that employees in his office complete reviews and when his office failed to meet USIS goals, he said he was terminated. According to the Washington Post, when he was about to sign a severance agreement, he noticed some language about the False Claims Act and called a lawyer friend who told him not to sign. He hired a whistleblower lawyer and filed a qui tam lawsuit shortly thereafter. According to Percival’s complaint, USIS circumvented quality control procedures for background checks that were required under its contract with the federal government. The federal government made payments to USIS that it would not have if it were known that the background checks were incomplete. According to the lawsuit, approximately 665,000 cases were dumped between 2008 and 2012 and included background checks on employees for a wide array of federal agencies, including the Department of Defense, the DOJ, Homeland Security, and the Defense Intelligence Agency. USIS, which was based in Falls Church, Virginia, is infamous for performing the background checks on Edward Snowden and the Navy Yard gunman Aaron Alexis.

    Companies that provide goods and services to the federal government are legally required to provide what they promised to provide. Companies that provide substandard or inadequate goods and services, but still invoice the government as if they provided full-quality goods and services are liable under the False Claims Act. Individuals who have knowledge of such fraud can work with a whistleblower attorney (the False Claims Act requires legal representation by counsel) to file a complaint and may receive between 15 and 30 percent of any subsequent recovery. Percival’s share in the USIS case was 20 percent. A whistleblower’s share can be affected by a variety of factors, such as the quality of the whistleblower’s information and whether the whistleblower personally contributed to the fraud. In this case, Percival’s award was contested by then-House Oversight Committee Chair Darrell Issa, who alleged during a February 2014 hearing that Percival was tipped off by a letter from the Federal Investigative Services regarding OPM’s belief that USIS background checks were incomplete. Rep. Issa requested that the Judiciary Committee and the Department of Justice evaluate the validity of Percival’s lawsuit. Percival’s $6 million award appears to put this matter to rest.

    At Chaikin, Sherman, Cammarata & Siegel, P.C., our team of experienced litigators provide legal representation for whistleblowers who allege fraudulent invoicing to the government by private contractors. If you have knowledge and documents substantiating a claim that a private company is providing goods and services to the government at less than the contracted-for quality, please contact us today. The False Claims Act includes a “first to file” rule, which can mean that only the first whistleblower to promptly report a certain fraudulent activity will receive a cash award. Because of this requirement, we recommend contacting us at your earliest convenience if you have information that could lead to a whistleblower case.

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