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Thursday, April 18, 2024 | Back issues
Courthouse News Service Courthouse News Service

Whistle-Blower Gets|$19 Million Payday

(CN) - A whistle-blower who claimed Verizon Communications overcharged the federal government is entitled to 20 percent of Verizon's $93 million settlement, a federal judge ruled.

Verizon paid the United States more than $93 million in an April 2011 settlement to resolve overcharging claims.

Uncle Sam said Verizon subsidiary MCI Communications Services invoiced the General Services Administration for a variety of taxes and surcharges. The government is not allowed to reimburse contractors for property taxes, carrier recovery charges or certain surcharges, according to the ruling in District of Columbia Federal Court.

The settlement stemmed from whistle-blower complaint filed by Stephen Shea and 2Probe LLC in 2007, on behalf of the government.

Shea was former managing director of TechCaliber, a telecom consulting firm.

While investigating the billing practices of MCI - later Verizon - Shea found the company had overcharged the government.

After Verizon paid the $93 million, a dispute arose between Shea and the government over Shea's share of the money.

Shea claimed he was entitled to more than $21 million (about 22 percent of the settlement), and the government objected.

Last week, U.S. District Judge Gladys Kessler partly agreed with Shea, and found he "deserves a robust share of the settlement proceeds."

"Without his experience, guidance, and analysis, the fraudulent conduct might well never have been discovered and understood; worst of all, it would very likely have continued far into the future," Kessler wrote.

While the award is large, Kessler found it does not exceed one-third of the total recovery, which whistle-blowers often obtain in private industry.

That the government had to spend a great deal of time and resources investigating does not minimize the value of Shea's contributions to the case, Kessler found.

She awarded Shea 20 percent of the $93.5 million recovery, and 15 percent of an additional $3 million recovery: $19.15 million.

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