ALEXANDRIA, Va. – Level 3 Communications, LLC (Level 3), a multinational telecommunications and Internet service provider company with offices throughout the world, including in McLean, agreed to pay $12,772,843 to settle allegations involving: kickbacks paid to former Level 3 officials in return for favorable treatment to subcontractors in connection with government contracts; improperly obtaining competitive bid information; and misstating compliance with woman-owned small business subcontracting requirements.
“Kickbacks paid in connection with government contracts defraud the American taxpayer and undermine the federal procurement process,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “EDVA is firmly committed to utilizing all available civil remedies to combat such alleged conduct and protect the public fisc.”
Level 3 entered a contract issued by the General Services Administration under which the U.S. Department of Defense Office of Inspector General ordered supplies and services, known as the “WITS 3” contract. Level 3 subcontracted work under the WITS 3 contract to MSO Tech, Inc. (MSO Tech) and P.V.S. Inc. (PVS), two Florida-based companies owned by William S. Wilson.
The United States alleged that in 2012, Wilson paid kickbacks to Level 3 senior managers Ronald Capallia and another individual to induce them to steer Level 3 subcontract work to MSO Tech and PVS. In return for these alleged kickbacks, MSO Tech and PVS were allegedly given favorable treatment and subcontracts. The United States also alleged that Capallia knowingly obtained protected competitor bid information in connection with the WITS 3 contract to gain an advantage in bidding on task orders on the contract.
Level 3 also entered into a contract with the U.S. Department of Homeland Security (DHS), known as the “Terrawatt” contract. The United States alleged that in 2011, Level 3 informed DHS that PVS qualified as a woman-owned small business in order to satisfy contractual obligations to award a certain portion of work under the Terrawatt contract to a woman-owned small business, despite Capallia and another individual knowing that PVS was owned and controlled by Wilson, and that the work awarded to PVS was in fact performed by MSO Tech.
The settlement resolves federal civil claims under the False Claims Act, the Anti-Kickback Act, and the Procurement Integrity Act. Level 3 cooperated during the investigation.
The settlement arises in connection with a lawsuit filed by a former Level 3 employee under the whistleblower provision of the False Claims Act. A whistleblower suit, or qui tam action under the False Claims Act, is commenced by an individual, known as a “relator,” filing a complaint under seal in the U.S. District Court, and providing a copy of the complaint and other evidence to the U.S. Attorney’s Office. The United States then has an opportunity to investigate the claims. The False Claims Act provides whistleblowers with a share of the government’s recovery.
The resolution obtained in this matter were the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia, the Defense Criminal Investigative Service, and the Department of Homeland Security’s Office of Inspector General.
This matter was investigated by Assistant U.S. Attorneys Krista Anderson and Gerard Mene.
The civil claims settled by this agreement are allegations only; there has been no determination of civil liability.
Related court documents and information from the civil lawsuit can be accessed on PACER by searching for Case No. 1:13-cv-1453. Court documents regarding related criminal proceedings can be found at Case Nos. 1:17-cr-223 and 1:17-cr-222.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.
USAO - Virginia, Eastern;
Department of Defense OIG