Department of Justice seal U.S. Department of Justice

Debra Wong Yang
United States Attorney
Central District of California

United States Courthouse
312 North Spring Street
Los Angeles, California 90012

July 11, 2005
For Information, Contact Public Affairs
Thom Mrozek (213) 894-6947


Los Angeles, CA - PricewaterhouseCoopers LLC (PwC), one of the so-called Big Four accounting firms, has paid the United States government $41.9 million to resolve allegations that it defrauded numerous federal government agencies over a 13-year period. Without admitting wrongdoing, PwC paid the settlement two weeks ago to resolve fraud claims in a "whistleblower" lawsuit that accused the company of overbilling for travel expenses.

The lawsuit, which was filed in United States District Court in Los Angeles in late 2000 by a former PwC partner, alleged that the firm knowingly overbilled many federal agencies that had contracted with PwC for auditing and consulting services. The federal agencies involved included the Department of Defense, the Department of Justice, the Environmental Protection Agency, the Securities and Exchange Commission, the Peace Corps, the Department of Education and the Department of Veteran Affairs.

The complaint specifically alleged that PwC charged the government agencies substantially more for travel expenses and credit card purchases than the firm actually spent. An investigation by the government following the filing of the lawsuit determined that PwC overbilled the government because its bills failed to take into account commissions, rebates and incentives given to PwC by travel companies and charge card issuers.

The lawsuit alleged that PwC management had been made aware of the problem through internal complaints by several partners, but it made no effort to refund the overpayments to the government.

The settlement covers conduct from July 1, 1990 through June 30, 2003.

The case was filed pursuant to the qui tam provisions of the False Claims Act by Neal Roberts, a retired PwC partner. Under the False Claims Act, private individuals can file suit on behalf of the government and receive up to 25 percent of the recovery when the government intervenes and takes over the case, as the government did here. In addition to the award that Roberts will receive - an amount yet to be determined - PwC agreed to pay Mr. Roberts $1,625,000 to cover his attorney's fees and costs.

In light of the settlement filed today in court, the Justice Department today asked United States District Judge Dean D. Pregerson to dismiss the case.

The government investigation team in the case included agents from the Army's Criminal Investigative Division, the Defense Criminal Investigative Service, the General Services Administration Office of Inspector General and the Department of Energy Office of Inspector General. A team of auditors from the Defense Contract Audit Agency conducted a thorough audit which was critical in accomplishing this settlement.


Release No. 05-100

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