Gen Digital Pays $55.1M False Claims Act Judgment for Knowing Overcharges to General Services Administration After Government Prevails at Trial

Gen Digital Inc. (formerly known as Symantec Corp.), located in Tempe, Arizona, paid $55.1 million to satisfy a judgment, concluding a decade of False Claims Act litigation. The judgment required the company to pay $16.1 million in damages and $36.8 million in civil penalties, plus post-judgment interest and costs.

“The department will hold accountable contractors that knowingly overcharge the United States to enrich themselves,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “The years spent litigating this case and taking it to trial demonstrate the department’s steadfast commitment to protecting taxpayer funds.”

Following a four-week bench trial in February and March 2022, the trial court found Symantec liable for making knowing false claims to the United States when it mispresented its commercial sales practices during the negotiation and subsequent performance of a General Services Administration (GSA) contract. In particular, the court concluded that Symantec made false statements to GSA during contractual negotiations in 2006 and early-2007 and continued to falsely certify throughout the performance of the contract through Sept. 30, 2012, that its disclosures of its commercial sales practices were current, accurate and complete. The false disclosures induced GSA to accept and then continue to pay higher prices than it would have had it known of Symantec’s actual commercial pricing practices.

The court also found that Symantec continuously violated the Price Reduction Clause, a standard term in these types of Multiple Award Schedule contracts that requires the contractor throughout performance of the contract to maintain GSA’s price position in relation to an identified customer or category of customer agreed upon in contract negotiations. These violations deprived the United States of discounts to which it was entitled.

“The trial team secured a $55 million judgment that holds accountable a contractor who intentionally tried to overbill the government,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “Because these schemes steal taxpayer dollars, the United States Attorney’s Office for the District of Columbia will be steadfast in its efforts to bring fraudsters to justice no matter the complexity of the matter, pursuing them through trial, if necessary, to secure a just outcome.”

“The United States deserves fair prices and accurate information from GSA contractors,” said GSA Deputy Inspector General Robert C. Erickson. “This outcome is the result of hard work and dedication by a cross-functional team from the U.S. Department of Justice, GSA and GSA Office of Inspector General.”

Gen Digital’s payment ends a lawsuit filed under the qui tam or whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The Act permits the United States to intervene and take over responsibility for litigating these cases, as the United States did here. The qui tam case is captioned United States ex rel. Morsell v. Symantec Corp., Civ. A. No. 12-0800 (DDC), and was brought by Lori Morsell, who administered the contract at issue for Symantec. Her share of the recovery has not yet been determined.

This successful litigation was a coordinated effort between the Civil Division’s Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the District of Columbia, with assistance from GSA’s Office of General Counsel and Office of Inspector General.

Senior Trial Counsel Daniel Schiffer and Trial Attorney F. Elias Boujaoude of the Justice Department’s Civil Division and Civil Chief Brian P. Hudak for the District of Columbia handled the matter.