CONCORD, NEW HAMPSHIRE – United States Attorney John P. Kacavas announced that Red River Computer Co., Inc. (“Red River”) of Claremont, New Hampshire has agreed to pay $2.3 million to resolve allegations that it violated the civil False Claims Act when doing business with various federal agencies, including the United States Department of Defense, the United States Department of Commerce, the United States Department of Interior, the Environmental Protection Agency, the Library of Congress, and the General Services Administration.
Red River operates as a reseller of information technology products and services. Red River does business with the government by entering into contracts to provide computer equipment, software, support, and other products and services to agencies of the federal government. An investigation by the United States identified concerns with respect to dozens of contracts that Red River had with the government. Those concerns included: (1) contracts in which Red River agreed to obtain Sun Microsystems service support coverage for certain server boards but did not arrange with Sun to obtain all of the requested service coverage despite being paid to do so; (2) a 2005 contract in which Red River agreed to provide Cisco SMARTNET for the Army but did not complete registration of the service with Cisco and subsequently obtained a partial refund without reimbursing the Army; (3) contracts in 2004 and 2006 in which Red River agreed to provide Sun software support for the Navy but did not arrange for Sun to provide the service despite being paid to do so; and (4) contracts in which Red River agreed to provide Panasonic branded memory for use in computers but provided third party memory without advising the appropriate government customers of this product substitution. Red River cooperated in the government’s investigation.
Without admitting any liability, Red River agreed to pay $2.3 million to resolve allegations that its conduct violated the civil False Claims Act. Under the False Claims Act, if it is established that a person has submitted or caused others to submit false or fraudulent claims to the United States, the government can recover treble damages and $5,500 to $11,000 for each false or fraudulent claim filed.
Although this civil settlement resolves Red River’s liability in this matter, the investigation is ongoing. This case was investigated by members of the Office of Investigations of the Office of Inspector General of the General Services Administration, the Defense Criminal Investigative Services, and the Federal Bureau of Investigation. The case was handled by Assistant United States Attorneys John J. Farley and Donald Feith.
