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HP Settles Kickback Suit With DOJ

The settlement with the Department of Justice is expected to cost Hewlett-Packard as much as $50 million.
Hewlett-Packard reported that it and the Department of Justice have reached a settlement in principle in a case in which HP was charged with soliciting and providing improper payments on technology contracts.

Adding that the settlement is still subject to the approval of the DOJ, the U.S. District Court in the Eastern District of Arkansas, and "appropriate agencies," HP did not provide a total dollar amount in the penalty, but said the settlement is likely to cost HP about 2 cents on its third-quarter fiscal year 2010 earnings. Based on the number of HP shares outstanding -- more than 2 billion -- the settlement could cost as much as $50 million.

"HP denies engaging in any illegal conduct in connection with these matters," the firm said in a brief statement late Monday. "HP has agreed to a settlement with the Department of Justice, without any admission of wrongdoing, in order to resolve the allegations in full."

HP noted that the matter involved an investigation into its GSA Multiple Award Schedule as well as separate allegations associated with a whistleblower complaint.

Also named in the original complaint were Accenture and Sun Microsystems. Accenture and Sun denied the allegations earlier.

The original litigation, filed in 2007, charged that beginning in the late 1990s, HP, Accenture, and Sun submitted false claims to the United States for IT hardware and services on numerous government contracts.

The original suits were filed in Little Rock federal court by whistleblowers Norman Rille and co-plaintiff Neal Roberts.

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