Diebold Subsidiary Agrees to Pay $850,000 to Settle Claims That it Used Unapproved Computer Techs at Social Security Administration

Baltimore, Maryland - Diebold Information and Security Systems, LLC, (Diebold-ISS), a Utah-based provider of computer repair services, has agreed to pay $850,000 to settle potential claims against the company under the False Claims Act that it failed to submit required suitability documentation to the Social Security Administration (SSA) for a substantial number of subcontractor personnel performing services under a five-year maintenance and repair contract, announced United States Attorney for the District of Maryland Rod J. Rosenstein.

The contract at issue was entered into by SSA and TFE Technology Holdings, LLC (“TFE”) in August of 2002 and ended in October, 2007. During that time, Diebold Incorporated purchased TFE and changed its name to Diebold-ISS. Under the contract, Diebold-ISS provided SSA with maintenance and relocation services to its LAN, personal computer workstations and peripheral computer equipment located throughout the country. The contract required personnel who performed services under the contract to undergo a suitability determination before their performance commenced, in order to insure that contractor employees would be suitable to comply with conditions relating to the confidentiality of information that may be entrusted to them. Diebold-ISS was to submit documentation to SSA, such as fingerprint cards, a statement of personal history, a declaration for federal employment, and a completed Fair Credit Reporting Act authorization form, so that SSA could make a suitability determination for each employee prior to his performance of contract services.

The settlement resulted from an investigation into Diebold-ISS’s compliance with the contract’s suitability determination requirements. That investigation resulted in allegations that while Diebold-ISS employees received suitability determinations before performing contract work, Diebold-ISS failed to submit required suitability documentation for many of its subcontractor personnel performing contract services, which resulted in repair work being performed by unapproved personnel. The government contends during the period of the contract Diebold-ISS submitted claims for payment to SSA, and received payment, for work performed by the unapproved personnel.

The investigation did not reveal any compromise of SSA’s information systems.

Enacted during the Civil War, the False Claims Act is the government’s primary civil tool to combat fraud and abuse in federal programs and procurement. The Act allows the Government to recover a civil penalty of $6,000 to $11,000 for each claim. Pursuant to the agreement, Diebold-ISS does not admit that it violated the False Claims Act, nor does the Government concede that its claims are not well founded.

United States Attorney Rosenstein commended Assistant United States Attorney Michael A. DiPietro and the Office of the Inspector General for Social Security Administration for their work on the investigation and settlement.