SACRAMENTO – California Attorney General Xavier Becerra today announced a $4 million settlement with VMware, resolving allegations that the software company violated the state False Claims Act by making false statements and overcharging the State and local governments for information technology software. Over a six-year period, California and local governments experienced substantial damages, which will be fully recovered under today’s settlement.
“When companies cheat the government, they cheat hardworking Californians and steal from universities, public schools, healthcare and public safety services,” said Attorney General Becerra. “In holding VMWare accountable, our taxpayers win to the tune of $4 million.”
VMWare, a manufacturer of cloud software and services, allegedly sold software to California and local governments at fraudulently inflated prices, violating the California False Claims Act. This was discovered when a whistleblower and former VMware executive alleged that the company raised prices and submitted inaccurate and incomplete information to the federal government. California and local governments often use federal pricing for their contracts.
This settlement underscores Attorney General Becerra’s commitment to stopping deceptive practices by companies that do business with government. In September, the attorney general announced a $7 million settlement involving multinational bank and financial services company HSBC for overcharging the California Public Employees Retirement System (CalPERS) in foreign currency trading. On July 13, he announced a $1 million settlement against the owner and operator of Legacy Post-Acute Rehabilitation Center, a skilled nursing facility in San Bernardino that was allegedly wrongfully billing Medi-Cal for patients needing a heightened level of skilled nursing care.
A list of settlement amounts and recipients is available here.
A copy of the settlement is available here.