On February 1, the U.S. Attorney for the Eastern District of Michigan announced that Siemens Industry, Inc., a subsidiary of Siemens Corporation, agreed to a $1 million settlement over allegations that the company violated the False Claims Act (FCA). The allegations stemmed from a qui tam whistleblower suit.
The alleged misconduct dates back to 2011 when Siemens entered a contract with the Hamtramck Housing Commission, a HUD-funded public housing authority in Hamtramck, Michigan, to install energy efficiency improvement measures at public housing facilities.
“During the development of that energy performance contract, Siemens calculated the amount of energy savings the improvement would deliver,” the government reports. “The Hamtramck Housing Commission submitted records to HUD using data from Siemens’s analysis. The settlement resolves allegations that Siemens relied on inaccurate data in its analysis, which led to the United States paying a larger annual subsidy to the Hamtramck Housing Commission than it otherwise would have.”
“Federal contractors are expected to deal honestly with federal agencies, even where there are intermediaries between the agency and the contractor,” said U.S. Attorney Dawn N. Ison.
The claims against Siemens were first brought by Kevin Kondrat and Jessica Jones under the qui tam provisions of the False Claims Act. Under the FCA’s qui tam provisions, whistleblowers with knowledge of government contracting fraud may file lawsuits on behalf of the U.S. government. In successful suits, qui tam whistleblowers are entitled to 15-30% of the government’s recoveries.
In this case, Kondrat andJones are set to receive $179,000
On July 25, a bipartisan group of senators introduced the False Claims Amendments Act of 2023, which address a few technical loopholes undermining the success of the FCA. The bill is widely supported by whistleblower advocates.
“The False Claims Act is America’s number one fraud-fighting law,” said whistleblower attorney Stephen M. Kohn. “These amendments are urgently needed to ensure that whistleblowers can continue to play their key role in protecting taxpayers from corporate criminals.”
Kohn sees the passage of the False Claims Amendments Act as one of the seven most urgently needed whistleblower reforms. National Whistleblower Center (NWC), where Kohn serves as Chairman of the Board, has issued an Action Alert calling on Congress to pass the bill.