The whistleblower who exposed a fraudulent billing scheme involving Verizon is owed several more million dollars from the government for the key role he played, a federal trial judge in Washington has ruled.
The U.S. Justice Department tried to convince the judge, Gladys Kessler of U.S. District Court for the District of Columbia, not to pay the whistleblower any additional money for his involvement in the False Claims Act case. Kessler's opinion is here.
Verizon Communications resolved the litigation in a $93.5 million settlement last February.
The suit, filed in 2007 and under seal for several years, alleged Verizon submitted false claims for illegal surcharges under two telecommunications contracts with the federal government in order to collect back certain costs of doing business.
DOJ had already paid the whistleblower, Stephen Shea, $13.7 million, the minimum he was owed under the false claim laws. Kessler, in a ruling issued Thursday, bumped up Shea’s take to 20 percent, meaning his overall award will be more than $18.8 million.
Shea’s attorney, Colette Matzzie of Washington’s Phillips & Cohen, declined to comment this morning through a spokeswoman. Matzzie had asked for an additional payment for Shea of nearly $7.5 million. The law firm has not disclosed how much money it received for its role in the case.
Shea is a former managing director at the consulting TechCaliber LLC, where he helped clients manage investments in telecommunications services and networks, Kessler said, noting that “many of his clients were Fortune 100 companies.”
The False Claims Act guarantees a whistleblower will receive a minimum payment of 15 percent and a maximum of 25 percent of the final settlement amount. The whistleblower’s share is based on how much the person contributed to the case.
Government lawyers downplayed the significance of Shea’s role in the action against Verizon, saying he had no first-hand knowledge of Verizon’s billing arrangements under the relevant contracts.
Kessler pulled a line from the government’s legal papers in which prosecutors said Shea’s complaint was “a guess, an educated guess, but a guess nonetheless that the defendant was billing the government for unallowable costs.”
“This is a profoundly unfair characterization of the nature and extent of the expertise, experience, knowledge, analysis and just plain hard work that Shea, and his lawyers, contributed to this litigation,” the judge said.
William Miller, a spokesman for the U.S. Attorney’s Office for the District of Columbia, declined to comment.
Shea, the judge wrote, was able to provide the government “critical information” that tends to become available in FCA cases until discovery is ongoing. He also participated in a presentation to the Justice Department to rebut Verizon’s denial of liability.
“Not only did Shea save the government a great deal of time and resources and contribute to obtaining a substantial settlement, it is certainly more likely that without this lawsuit, Verizon would have continued to overcharge the United States indefinitely, i.e., as long as it could get away with it,” Kessler said.