New York, NY -- Everything was seemingly going good for HP. Their latest line of ePrint printers were starting to come out, they were able to have a reasonable financial YTD, and the USITC was investigating some patent suits for them. Now, the company finds itself dealing with the other side of a suit. An article dated 2 August which appeared via the Bloomberg website, spoke of an investigation in HP has been accused of false billings. The settlement was agreed to in principle, according to Bloomberg, by HP and the U.S. Justice Department.
The other piece of the equation that HP has to deal with are allegations brought by a whistleblower that HP paid kickbacks in order to receive government contracts. To settle these disputes, HP has been forced to lower their forthcoming 3rd quarter earnings by two cents per share. Neither HP or the Justice Department are saying a whole lot about the matter publicly at this point.
To be perfectly clear, these allegations are not from recent times. The False Claims allegations were originally filed in 2004 and also included the company Accenture. The DOJ joined the “party” in 2007 “claiming HP paid kickbacks to other technology vendors that entered an alliance to secure government contracts.” Under the government’s False Claims Act, private citizens of the USA can sue on the government’s behalf and reap some of the “recovery” benefits.
The DOJ accuses HP of “‘exploiting the trust of the government’” and used its partnerships for their own benefit. The case also states that HP paid fees to its partners for convincing government employees to purchase products from HP.
We will continue to monitor this story and post any updates as they are made available.
