Virtualization News

12 Shocking Allegations From The VMware-Carahsoft Government Overcharging Lawsuit

Kevin McLaughlin

Reading Between The Lines

Dane Smith, VMware's former vice president of Americas sales, filed a civil lawsuit in 2010 against VMware and reseller partner Carahsoft for allegedly overcharging the federal government over a period of several years. That now-settled lawsuit remained sealed until this week, when the Department of Justice published details of the allegations.

VMware and Carahsoft allegedly gave commercial customers better discounts than government customers, and recommended that the government buy more software than it actually needed, according to the publicly available lawsuit document in the case. By allegedly providing inaccurate pricing and other information to the government, VMware and Carahsoft were accused of violating the False Claims Act, a law that dates to the Civil War. VMware and Carahsoft paid $75.5 million to settle the case, but VMware denies any wrongdoing.

Smith, for his part, claims that VMware management retaliated against him, and eventually fired him, after he reported the alleged fraud to his superiors.

Neither Smith nor Carahsoft responded to CRN's requests for comment.

A VMware spokesman provided the following statement on the matter: "VMware cooperated fully with the DOJ and GSA in connection with their multi-year investigation regarding VMware's government sales practices covering the period between 2007 and 2013. VMware believes that its commercial sales practice disclosures to the GSA were accurate and denies that it violated the False Claims Act. The Company nevertheless elected to settle this lawsuit rather than engage in protracted litigation with one of its important customers – the federal government."

Following are 12 shocking allegations from Smith's lawsuit documentation.

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