Direct Resource Inc. agreed on Tuesday to pay the federal government $450k over allegations the company violated the False Claims Act by misrepresenting the country of origin of products sold to government agencies.  Under the Trade Agreements Act, the federal government may not purchase goods or services from countries which do not have reciprocal trade agreements with the United States.  Information brought forward by a relator, or whistleblower, in a lawsuit filed under the qui tam provisions of the False Claims Act, alleged that Direct Resource Inc. sold products to the General Services Administration (GSA) which were manufactured in China, a country not on the list of countries identified by the GSA as fair traders with the United States.

The False Claims Act covers a broad range of fraudulent activity implicating taxpayer funds, including the knowing use of a false record or statement made in relation to a false claim for payment or property from the federal government.  To help detect and punish fraudulent actors, the False Claims Act contains qui tam provisions which enable private citizens with knowledge of fraud to bring a False Claims Act action on behalf of the United States.  To encourage employees and private citizens to report fraud which they become aware of, the False Claims Act provides robust employee protections from unlawful discharge, demotion, or discrimination and further authorizes the government to reward whistleblowers with up to 30 percent of the share obtained in a successful recovery.

 

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