US Justice Dept slaps fraud charges on Oracle

The US Justice Department has charged Oracle Corp with defrauding the American government on a software contract that involved sales worth hundreds of millions of dollars.

"The government alleges that Oracle defrauded the United States on a General Services Administration (GSA) software contract that was in effect from 1998 to 2006 and involved hundreds of millions of dollars in sales," the Justice Department said on Thursday.

According to Justice Department, Oracle misrepresented its true commercial sales practices, leading to government customers receiving deals far inferior to those the company gave to its commercial customers.

Under the contract, GSA used Oracle's disclosures about its commercial sales practices to negotiate the minimum discounts for government agencies who purchased the company's software.

"The contract required Oracle to update GSA when commercial discounts improved and extend the same improved discounts to government customers," the Justice Department said in a statement.

The complaint has been filed against Oracle Corp and Oracle America Inc.

Paul Frascella, a former employee at Oracle had originally raised these allegations.

"We take seriously (these) allegations that a government contractor has dealt dishonestly with the US. When contractors misrepresent their business practices to the government, taxpayers suffer," Tony West, Justice Department's Assistant Attorney General (Civil Division), said.