Bienert | Katzman Negotiates $1.2 million Settlement in a Whistleblower Lawsuit Involving the Sale of Chinese Computer Parts to the Government

Tue 28th Jan 2020, Blog, Case Successes

Bienert | Katzman, representing a whistleblower, filed a lawsuit on behalf of the federal government claiming that three computer part suppliers wrongly sold various federal agencies disguised Chinese products, including computer mice. One of the three defendants agreed to settle for $1.2 million.   

In order to support domestic manufacturing and business with favored trading partners, Congress enacted the Trade Agreements Act (“TAA”).  The TAA requires that government suppliers ensure that products sold to federal government agencies are from one of the TAA’s designated countries.  China is not on the approved list. 

The lawsuit alleges that the named defendants knew that Chinese-made parts were cheaper, so they decided that they would buy Chinese-made products, hide the fact that they were from China when they were shipping the products to the government, and make more money.  They did this by falsely claiming that products the government purchased came from trading partners and by removing stickers and boxes that said “Made in China.” 

The disguised Chinese products the three defendants sold were shipped to various federal agencies, including the Departments of the Navy and Army.  Following their failure to win dismissal of the action and initial discovery, one of the suppliers Bienert | Katzman sued on behalf of the government agreed to pay $1.2 million to settle the matter against it.  A portion of that award will go to Bienert | Katzman’s client.  The case against the remaining two defendants is pending in the Central District of California, United States ex rel. Michael Edman v. Ma Laboratories, Inc. et. al., SACV16-01828-CJC

 “Disguising the origin of products supplied to our federal government to sell it cheaper, “Made-in-China” computer products not only runs afoul of Congress’ goal to support manufacturing in the US and with our trading partners but also exposes the federal government to security risks,” says Bienert | Katzman Partner Ariana Seldman Hawbecker, who worked on the matter along with attorneys Tom Bienert and Ali Matin of Bienert | Katzman and Phil Hilder and Paul Creech of Hilder & Associates in Texas.  Hawbecker added, “we hope that this lawsuit, and the resulting recovery, encourages employees who witness fraud on the government to report it.  Our government gives billions of dollars each year to a myriad of companies and brave whistleblowers serve a vital role in recovering improper, false, and fraudulent charges.”

Bienert | Katzman represents whistleblowers in qui tam lawsuits alleging fraud by government suppliers and contractors, pharmaceutical companies, and other health care companies.  These lawsuits, if successful, provide that the whistleblower may recover a percentage of the government’s monetary award. 

If you work at or with a company that you believe has engaged in fraud on the government, or want to report tax or accounting fraud under the IRS or SEC’s whistleblower provisions, or fraud on any other state or government agency, Bienert | Katzman’s attorneys can guide you through that process, no matter what part of the country you may be in. If you think you may have a whistleblower matter, please contact us at 949-369-3700.