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U.S. Investigations Services Agrees to Forego at Least $30 Million to Settle False Claims Act Allegations

DOJ news release: “The Justice Department announced today that U.S. Investigations Services Inc. (USIS) and its parent company, Altegrity, have agreed to settle allegations that USIS violated the False Claims Act (FCA) for conduct involving a contract for background investigations that USIS held with the U.S. Office of Personnel Management (OPM).  The companies have agreed to forgo their right to collect payments that they claim were owed by OPM, valued at least at $30 million, in exchange for a release of liability under the FCA.  USIS and Altegrity are headquartered in Northern Virginia.  From its privatization in 1996 until September 2014, USIS provided background investigations services for OPM under various fieldwork contracts.  The government alleged that beginning in at least March 2008 and continuing through at least September 2012, USIS deliberately circumvented contractually required quality reviews of completed background investigations in order to increase the company’s revenues and profits.  Specifically, USIS allegedly devised a practice referred to internally as “dumping” or “flushing,” which involved releasing cases to OPM and representing them as complete when, in fact, not all the reports of investigations comprising those cases had received a contractually-required quality review [for example, Edward Snowden].  The government contended that, relying upon USIS’ false representations, OPM issued payments and contract incentives to USIS that it would not otherwise have issued had OPM been aware that the background investigations had not gone through the quality review process required by the contracts. “Shortcuts taken by any company that we have entrusted to conduct background investigations of future and current federal employees are unacceptable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Justice Department will ensure that those who do business with the government provide all of the services for which we bargained.”   “Contractors who do business for the federal government have a responsibility to provide the goods and services that they promise,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia.  “This particular company failed to meet its obligations of comprehensively reviewing the backgrounds of current and prospective federal employees.  This settlement demonstrates our commitment to holding government contractors accountable.”

  • “The claims resolved by the settlement agreement are allegations only and there has been no determination of liability.  The case is United States of America, ex rel., Blake Percival, v. U.S. Investigations Services, LLC, No. 14-cv-00726-RMC (D.D.C.).”

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