EMC settles federal kickback, false claims lawsuit

EMC Corp., a provider of information technology infrastructure systems, has agreed to pay $87.5 million to settle a federal lawsuit alleging the firm provided kickbacks and made false claims to obtain federal contracts, the Justice Department said Tuesday.

The U.S. government alleged that EMC falsely claimed in contract negotiations with the General Services Administration that it would provide price comparisons showing that the government was getting the lowest price provided to commercial customers for similar services. "EMC knew that it was not capable of conducting such a comparison, and so EMC's representations during the negotiations - as well as its subsequent representations to GSA that it was conducting the comparisons - were false or fraudulent," the department said in a news release.

The company also was accused of engaging in an illegal kickback scheme to persuade the government to purchase EMC products. The firm allegedly paid consulting fees to companies for recommending that a government agency purchase EMC's products.

"Misrepresentations during contract negotiations and the payment of kickbacks or illegal inducements undermine the integrity of the government procurement process," Tony West, assistant attorney general for the department's Civil Division, said in a statement.

EMC spokesman Patrick Cooley said his firm "has always denied and will continue to deny any liability arising from the allegations made in this case. We're pleased that the expense, distraction and uncertainty of continued litigation are behind us." He added that some of the allegations stem from events nearly a decade ago and noted that EMC continues to provide services to "numerous" federal agencies.