Little-known law awarded Racine man share of settlement in fraud case

By GINA BARTON 

gbarton@journalsentinel.com Posted: July 3, 2005

A 62-year-old Racine man is about to become a millionaire for blowing the whistle on a contractor who he says was cheating the federal government.

Gerald R. Rademacher, a former district sales manager for Softview Computer Products, is set to receive $1.575 million from the U.S. government, which will come from a $9 million legal settlement paid by the company.

Rademacher filed suit against Softview, which later merged with the New York-based Humanscale, on the government’s behalf in June 2003. A federal law known as the False Claims Act allows employees to file such suits and to collect part of the damages if they are successful.

Rademacher’s suit claimed that Humanscale was overcharging the federal government for computer accessories. Jeffrey A. Belkin, the Atlanta-based attorney who represents the company, did not return telephone messages left Friday. The settlement agreement, filed Thursday, says that Humanscale denies the allegations and does not admit wrongdoing. Rather, the company has agreed to pay the government $9 million, “to avoid the delay, uncertainty, inconvenience and expense of protracted litigation of these claims,” the settlement document says.

Government cost at issue

Rademacher’s suit levels several allegations against his former employer. According to the suit, the General Services Administration, in charge of purchasing for federal government agencies, demands certification from vendors that they are giving the government their best prices. Between 1998 and 2004, Humanscale gave lower prices to other customers, the suit claims. For example, 9- to 14-inch anti-radiation computer screens were sold to the government for $77. Meanwhile, Toyota Motor Products got 14-inch screens for $52 and AT&T Corp. and Chase Manhattan Bank paid $66 for the screens, the suit says.

Rademacher also alleged that the company had misrepresented itself as a small, Washington, D.C.-based business owned by a woman, which gave it an edge in winning contracts. In reality, Rademacher’s suit says, the Washington, D.C., facility was one of many district sales offices for the larger company, principally owned by a man.

Finally, the suit alleged that the company failed to disclose that one of its products contained a part manufactured outside the United States.

According to the company’s Web site, http://www.humanscale.com/, Humanscale was founded in 1982 and “is generally recognized as the leading manufacturer of ergonomic products for the office.”

“Humanscale serves, among others, the majority of Fortune 1000 companies,” the site says. “Our products are available through retailers, contract furniture dealers and direct via our 14 sales offices in the United States. We also maintain offices in London, Prague and China, which oversee our worldwide distribution network. Manufacturing facilities are located in New Jersey, California and Dublin, Ireland.”

Authorities alerted in 2000

Rademacher, who is now retired, worked for the company from 1992 until 1999, when he resigned to take care of his ailing father, said his attorney, Paul Scott of San Francisco. Rademacher first approached the government about the over-charging in 2000, Scott said.

“Mr. Rademacher is a courageous man who showed a great deal of resolve in pursuing this matter and is very deserving of the reward he received,” Scott said.

The government took over the case against Humanscale earlier this year.

Percentage awarded

The government does not choose to take over all cases under the False Claims Act, Scott said. When it does, the whistle-blower can collect between 15% and 25%. When it doesn’t, the whistle-blower gets 25% to 30%.

“In my view, this is an important statute that people sometimes don’t realize is available to them to address fraud,” Scott said.