Our law firm, with the cooperation of the U.S. Department of Justice (DOJ), has settled an extremely important whistleblower lawsuit against U.S. Investigations Services, Inc. (USIS), a private government contractor. USIS, formerly the federal government’s largest provider of security background checks, blatantly violated the False Claims Act. Larry Golston and Dee Miles represented Blake Percival, a former USIS employee, in the case. Mr. Percival filed a whistleblower complaint in 2011 alleging that USIS violated the FCA in performing a contract with the Office of Personnel Management (OPM) to perform background investigations of federal employees and those applying for federal service. Obviously, this dealt with very sensitive matters relating to national security.
The lawsuit filed on behalf of Mr. Percival alleged that USIS knowingly conducted flawed investigations of individuals seeking security clearances. Beginning in at least March 2008 and continuing through at least September 2012, USIS management devised and executed a scheme to deliberately circumvent contractually required quality reviews of completed background investigations in order to increase the company’s revenues and profits.
USIS acknowledged that it was hired by the U.S. Government to conduct background checks for Edward Snowden, who leaked NSA surveillance documents to the public. USIS also performed the security background check for Aaron Alexis, a technology contractor who shot 12 people to death at the Washington Navy Yard last year. The Snowden and Alexis cases drew the USIS’s work, or lack thereof, into the national spotlight and underscored the most serious allegations made by Mr. Percival.
Specifically, Mr. Percival and the United States alleged in the lawsuit that USIS engaged in a practice referred to internally as “dumping” or “flushing,” which involved releasing cases to the Office of Personnel Management as complete when in fact investigations on individuals were either not complete or no substantive investigation had even been performed at all. Approximately 40 percent of all USIS security background checks — at least 665,000 in total — involved dumping/flushing, which resulted in individuals receiving security clearances for positions for which they were not properly vetted.
The government joined the lawsuit in 2013. However, in the spring of last year, Altegrity, the parent company of USIS, filed for bankruptcy. That made it much more difficult for the government to recover all that the company owed and for Mr. Percival to receive a whistleblower reward. Under the whistleblower provisions of the False Claims Act, Mr. Percival, as a whistleblower, is entitled to receive up to 30 percent of any money the government recovers. This is both an incentive and a reward for the tremendous sacrifices — both personal and professional — whistleblowers often make by reporting the fraudulent conduct by governmental contractors. Mr. Percival was fired by USIS and had a most difficult time financially for more than four years.
Our lawyers, even with the bankruptcy problem, recognized the importance of this case, and fought hard to continue the litigation. The Justice Department agreed to remain a part of the case. Ultimately, USIS agreed to forego at least $30 million in payments legitimately owed to the company in order to settle the government’s allegations.
Mr. Percival is one of the most important whistleblowers in recent history. USIS was a key part of this nation’s security procedures, and they were blatantly lying about having completed critical background checks on people who would receive top secret clearances. Mr. Percival put his future and that of his family, as well as years of hard work, on the line when he reported USIS’ fraudulent conduct. As a result of what he did, our nation is now much safer. The importance of this man’s actions cannot be understated. He is a true American hero!
Being a whistleblower is not something Mr. Percival set out to do. But because of the enormous safety and national security concerns involved, he felt compelled to act. Blake Percival should be commended for his efforts in bringing this national security issue to light. Hopefully, this case will embolden others who are aware of fraud being perpetrated against the Government to come forward and tell their stories and assist the Government to combat fraud by government contractors.
This is one of the most important whistleblower cases in U.S. history. The fact that it involved national security issues made it so. We were honored to have been a part of this very important case.