Telecommunication firm pays settlement to resolve suit

Two former employees of a large telecommunication company helped the United States government and the state governments of 9 states recover $16.5. The settlement resolves a long-standing suit.

In 2004, two former company employees filed a whistleblower suit against Avaya, Inc. for alleged fraud against the government. The two employees claim that from the mid-1990s and 2006, Avaya Inc. billed hundreds of government agencies and collected payments for phone systems that did not work because of missing parts. The two employees also allege that Avaya, Inc. billed its government customers and received payments for phone systems that were no longer in service because they were outdated. In response to these allegations, Avaya and CIT Group Inc., agreed to pay $16.5 million to the United States without admitting any wrongdoing. The two whistleblowers in the case will receive $3.3 million in helping expose the alleged fraud. The two companies will pay the federal government along with 9 state government’s money as part of a settlement agreement.