Thrift Savings Plan contractor settles lawsuit

A Federal Thrift Investment Board subcontractor has agreed to pay the government $425,000 to settle allegations of falsifying work records, the Justice Department said Monday.

SunGard Employment Benefit Systems-a unit of SunGard Business Systems-was accused of overstating the hours it had worked to develop an automated record- keeping system for the Federal Thrift Investment Board. SunGard developed the system as a subcontractor for Materials Communications & Computers, which received the contract after a similar deal with American Management Systems fell apart in 2001.

The Justice Department and the U.S. Attorney's Office for the Northern District of Alabama filed the lawsuit against SunGard in June 2002 after former SunGard employee Frank Roemer went public with allegations of falsified work records. Under the whistleblower provisions of the False Claims Act, Roemer will receive $85,000 of the settlement.

Representatives of the Thrift Board said they could not comment on the settlement.

SunGard agreed to the settlement but did not admit any guilt.

"SunGard Employee Benefit Systems continues to provide support for the ongoing operation and maintenance of the Thrift Savings Plan system," the company said in a statement issued Monday. "SunGard Employee Benefit Systems agreed to the settlement to ensure that its continuing support of the federal government retirement plan proceeds without distraction, and to expeditiously resolve the civil action."

In the statement, company officials described Roemer's allegations as "disputed," and said that they have been cooperating fully with federal investigators. "We are disappointed that these unjustified allegations were ever made, and we are gratified that they are now being dismissed," said Ray Davis, group chief executive officer of SunGard Employee Benefit Systems. The company dismissed the $425,000 as "immaterial to SunGard's financial results."

U.S. prosecutors, however, described the settlement in a different light.

"Today's settlement again demonstrates the United States' commitment to protecting the federal government from fraud and abuse," said Peter Keisler, assistant Attorney General for the Justice Department's Civil Division. "The federal government relies on the honesty of its contractors to provide accurate billing information."