On May 11, the U.S. Department of Justice announced that GCI Communications Corp. (GCI) agreed to pay over $40 million to settle charges that it violated the False Claims Act (FCA). The case stemmed from a qui tam suit filed by a whistleblower who will receive $6.4 million.
According to the DOJ, the Anchorage-based GCI violated the FCA by “knowingly inflating its prices and violating Federal Communications Commission (FCC) competitive bidding regulations in connection with GCI’s participation in the FCC’s Rural Health Care Program.”
“The United States alleged that, between 2013 and 2020, GCI failed to comply with FCC regulations that governed how telecommunications companies must calculate their prices for purposes of claiming subsidy payments, and as a result GCI received greater subsidy payments than it was entitled to,” the DOJ states. “The United States further alleged that GCI caused Eastern Aleutian Tribes Inc., a rural health care provider in Alaska, to agree to inflated prices after the relevant contract was competitively bid.”
“Telecommunications providers that seek to participate in important FCC programs like the Rural Health Care Program must comply with applicable rules, including those governing how they competitively bid on contracts and set their prices,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “Today’s settlement demonstrates our continuing commitment to preventing the misuse of taxpayer funds.”
The qui tam provisions of the FCA enable private citizens to file lawsuits on behalf of the government if they know of an individual or company defrauding the government. Qui tam whistleblowers are eligible to receive between 15 and 30% of the government’s recovery.
In this case, Robert Taylor, GCI’s former Director of Business Administration, filed a qui tam suit against GCI and will receive $6.4 million as his share of the recovery.