ACS To Pay $2.6 Million To Settle Federal Fraud Charges

Under contract with a local government agency in Dallas, ACS was tasked with enrolling individuals in benefits programs funded by the federal agencies.

By Paul McDougall
InformationWeek
July 6, 2007

Outsourcer Affiliated Computer (ACS) Services has agreed to pay more than $2.6 million to settle charges it over billed the federal government for business services. Under a deal disclosed earlier this week by the office of U.S. Attorney Richard Roper, ACS will pay $2.65 million to the U.S. government to resolve charges under the False Claims Act.

The federal government alleged that ACS employees submitted a number of fake claims for payment from 2002 to 2005 for work related to outsourcing contracts funded by the U.S. Department of Agriculture, the Department of Labor, and the Administration for Children and Families at the U.S. Department of Health and Human Services.

Under contract with a local government agency in Dallas, ACS was tasked with enrolling individuals in benefits programs funded by the federal agencies. ACS' compensation was based partly on the number of individuals enrolled.

In a statement released Tuesday, Roper's office said ACS voluntarily reported that some of its employees were inflating the number of enrollees in order to boost revenue from the program.

In the statement, Roper, who represents the U.S. Court for the Northern District of Texas, said ACS fully cooperated with the subsequent federal investigation into the misconduct. Wednesday's edition of the Dallas Morning News reported that four ACS employees were terminated as a result of their participation in the scheme.

ACS is the nation's third-largest, pure-play outsourcing provider. Earlier this year, company founder and chairman Darwin Deason disclosed an effort to take the publicly traded company private in partnership with a private equity group. In June, ACS said it planned to solicit buyout offers from other parties in addition to Deason's group.

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