April 15, 2009

NetApp agrees to $128 million settlement

NetApp Inc. and NetApp U.S. Public Sector Inc. have agreed to pay $128 million to settle charges that the company defrauded the U.S. government, officials said.

The agreement marks the largest contract fraud settlement the General Services Administration has obtained to date, the U.S. Justice Department said Wednesday.

The department said the company had a government contract to provide goods and services under the General Services Administration's Multiple Award Schedule program.

Authorities alleged that NetApp knowingly failed to meet its contractual obligations to provide the GSA accurate information about its commercial sales practices, including discounts offered to other customers.

This settlement shows that the United States will not tolerate misconduct in the pricing of government contracts, said Michael Hertz, acting assistant attorney general for the department's Civil Division.

The whistle-blower who exposed the fraud, Igor Kapuscinski, will receive a $19.2 million share of the settlement, the statement said.