Company With McLean Office To Pay $12.7M For Civil Claims

MCLEAN, VA — Level 3 Communications, a telecommunications and Internet service provider company with offices in McLean and worldwide, will pay a settlement of $12.7 million as a result of civil claims under the False Claims Act, the Anti-Kickback Act, and the Procurement Integrity Act.

The allegations involve kickbacks paid to former Level 3 officials for favorable treatment to subcontractors in connection with government contracts, competitive bid information that was improperly obtained, and misstated compliance with woman-owned small business subcontracting requirements.

The settlement and claims originated with a lawsuit from a former Level 3 employee using the whistleblower provision of the False Claims Act. The complaint was filed in U.S. District Court, and federal prosecutors have a chance to investigate the claims. Whistleblowers get a share of the government's recovery under the False Claims Act.

According to prosecutors, Level 3 had a contract with General Services Administration involving the U.S. Department of Defense Office of Inspector General ordering supplies and services. The company subcontracted work to MSO Tech, Inc. and P.V.S. Inc., two companies owned by William S. Wilson. Prosecutors allege Wilson paid kickbacks in 2012 to Ronald Capallia and another senior manager at Level 3 to convince them to direct subcontract work to his companies. The two companies were given favorable treatment and subcontracts due to the alleged kickbacks.

"Kickbacks paid in connection with government contracts defraud the American taxpayer and undermine the federal procurement process," stated Raj Parekh, acting U.S. Attorney for the Eastern District of Virginia.

Prosecutors also allege that Capallia knowingly obtained protected competitor bid information to gain an advantage in bidding on task orders on the contract.

For another Level 3 contract with the U.S. Department of Homeland Security, prosecutors claim Level 3 told DHS that PVS was a woman-owned small business in 2011. That claim was made to satisfy requirements of the contract to award a portion of contract work to a woman-owned small business. But Capallia and another individual knew PVS was owned by Wilson, and the work awarded to PVS was actually done by Wilson's other company Tech.

Level 3 cooperated with the during the investigation. The civil claims made before the settlement are considered allegations and not civil liability. The settlement was reached through collaboration 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.