FOR IMMEDIATE RELEASE CIV

THURSDAY, AUGUST 16, 2007 (202) 514-2007

WWW.USDOJ.GOV TDD (202) 514-1888

IBM & PriceWaterHouseCoopers to

Pay U.S. more than $5.2 Million
to Settle Allegations of False Claims
WASHINGTON – IBM Corporation and PriceWaterhouseCoopers have both agreed
to pay the United States more than $5.2 million to settle allegations that the
companies solicited and provided improper payments and other things of value on
technology contracts with government agencies, the Justice Department announced
today. IBM has agreed to pay $2,972,038.50, while PWC will pay $2,316,662.

According to the complaints against the companies, IBM and PWC knowingly
solicited and/or made payments of money and other things of value, known as
alliance benefits, to a number of companies with whom they had global alliance
relationships. The government intervened in the actions because the alleged alliance
relationships and resulting alliance benefits amount to kickbacks, as well as
undisclosed conflict of interest relationships in violation of contractual provisions
and the applicable provisions of the federal acquisition regulations.

“The payment of kickbacks or illegal inducements undermines the government

procurement process,” said Peter D. Keisler, Assistant Attorney General for the
Civil Division. “The Justice Department is acting in these cases and in the overall
investigation to protect the integrity of the procurement process for technology
products and services.”

The actions against IBM and PWC are part of a larger ongoing investigation of
government technology vendors and consultants that has already resulted in
complaints being filed in April 2007 in Arkansas against Accenture, Hewlett-
Packard, and Sun Microsystems. IBM and PWC separately cooperated in the
investigation and were able to resolve the issues relating to their alliance activities
without further litigation.

The complaints were originally filed in September 2004 under the qui tam or
whistleblower provisions of the False Claims Act by Norman J. Rille and Neal A.
Roberts. The qui tam statute allows persons who file successful actions alleging
fraud against the government to receive a share of any resulting recovery. Rille and
Roberts will receive an amount to be determined in the near future.
The settlement resulted from an investigation by the Justice Department’s Civil
Division; the U.S. Attorney’s Office in Little Rock, Ark.; the Department of
Energy’s Office of Inspector General; the Defense Criminal Investigative Service;
the General Services Administration Office of the Inspector General; NASA Office
of the Inspector General; the Army Criminal Investigation Command; the Defense
Contract Audit Agency; the Environmental Protection Agency Office of the
Inspector General; the Postal Service Office of the Inspector General; the Navy
Criminal Investigative Service; and the Air Force Office of Special Investigations.

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