A whistleblower complaint against an office furniture company and its parent company has resulted in a settlement of $7.1 million. According to a U.S. Department of Justice (DOJ) press release, Knape & Vogt Manufacturing Co. and Workrite Ergonomics LLC (collectively Workrite) have agreed to pay to resolve allegations that they violated the False Claims Act by overcharging the government for furniture. Workrite allegedly violated their contracts with the General Services Administration (GSA) by not lowering prices when providing products for the government.
The whistleblower lawsuit alleges that between 2009 and 2017, Workrite sold furniture to the government at a higher price than agreed upon in their contracts under the Multiple Award Schedule (MAS). The MAS is a program that helps the government acquire office equipment and other general goods and services. The lawsuit also alleges that Workrite did not disclose to the government important information about their commercial sales practices.
Whistleblower Michael J. Franchek will receive a $1.27 million reward for his part in bringing the case to settlement. A former employee of Workrite in Park City, Utah, Franchek sued Workrite under the qui tam provisions of the False Claims Act. Under these provisions, individuals can file lawsuits on behalf of the government and receive a reward for it. The government gets a chance to take up the case if they believe it would be advantageous to do so. If the government repossessed any money from the company or individual accused of violating the False Claims Act, the whistleblower is eligible for 10 to 30% of the total amount. These awards help encourage more whistleblowers to stand up and report fraud when they discover it in the workplace.
Read the DOJ’s press release here.
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