Austin law secures $12.5M settlement in whistleblower suit
Austin law firm Lawrence Arenella & Satija LLP secured a $12.5 million settlement against Fluor Corp. on behalf of Cosby Coleman, a 15-year employee who worked in the company's Sugar Land government contracting office.
The settlement, entered in federal court in Santa Ana, Calif., goes to the federal government and the whistleblower. Coleman and his attorney will receive $2.75 million of the whistleblower's share of the settlement, plus Fluor will pay legal fees.
The suit alleges that, from 1995 to 1998, Fluor knowingly overbilled the government under several contracts held by its Fluor Daniel subsidiary (now known as Fluor Enterprises) with the U.S. Energy and Defense departments.
"This has been an incredible David versus Goliath battle for both Cosby Coleman and our firm," says Paul Lawrence, a partner with Lawrence Arenella & Satija.
Fluor (NYSE: FLR - News) provides engineering, procurement, construction, operations, maintenance and project management services. The company is based in Aliso Viejo, Calif., but is moving its headquarters to the Dallas area.
Lawrence filed Coleman's whistleblower case in California in March 2000, alleging Fluor Daniel used a fictitious accounting entity, Fluor Daniel Federal Operations, to recover corporate overhead costs that weren't proper under the government's cost accounting standards.
The costs disputed by Coleman included multimillion-dollar bonuses paid to Fluor's management, $13.2 million invested in raw land, $7.3 million for improvements to office buildings Fluor leased to other companies, $2.6 million for construction of a parking garage Fluor leased to another company, $410,000 spent for luxury condos in Palm Springs, Calif., $1.8 million for a fine art collection, $75,000 for Mercedes-Benz convertible driven by the company's president and $20,000 for an antique Chippendale chair.
Coleman alleges he made numerous attempts to point out the violations to senior management, but no action was taken.
Fluor's general counsel, Larry Fisher, says the settlement "avoids substantial further litigation costs in what could have been a lengthy and complex legal proceeding."
He says he thinks the company ultimately would have prevailed in the case.
"After careful management consideration and review, it was determined that a settlement without admitting any wrongdoing would allow the company to focus on current and future operations without further distraction," Fisher says.
The settlement, entered in federal court in Santa Ana, Calif., goes to the federal government and the whistleblower. Coleman and his attorney will receive $2.75 million of the whistleblower's share of the settlement, plus Fluor will pay legal fees.
The suit alleges that, from 1995 to 1998, Fluor knowingly overbilled the government under several contracts held by its Fluor Daniel subsidiary (now known as Fluor Enterprises) with the U.S. Energy and Defense departments.
"This has been an incredible David versus Goliath battle for both Cosby Coleman and our firm," says Paul Lawrence, a partner with Lawrence Arenella & Satija.
Fluor (NYSE: FLR - News) provides engineering, procurement, construction, operations, maintenance and project management services. The company is based in Aliso Viejo, Calif., but is moving its headquarters to the Dallas area.
Lawrence filed Coleman's whistleblower case in California in March 2000, alleging Fluor Daniel used a fictitious accounting entity, Fluor Daniel Federal Operations, to recover corporate overhead costs that weren't proper under the government's cost accounting standards.
The costs disputed by Coleman included multimillion-dollar bonuses paid to Fluor's management, $13.2 million invested in raw land, $7.3 million for improvements to office buildings Fluor leased to other companies, $2.6 million for construction of a parking garage Fluor leased to another company, $410,000 spent for luxury condos in Palm Springs, Calif., $1.8 million for a fine art collection, $75,000 for Mercedes-Benz convertible driven by the company's president and $20,000 for an antique Chippendale chair.
Coleman alleges he made numerous attempts to point out the violations to senior management, but no action was taken.
Fluor's general counsel, Larry Fisher, says the settlement "avoids substantial further litigation costs in what could have been a lengthy and complex legal proceeding."
He says he thinks the company ultimately would have prevailed in the case.
"After careful management consideration and review, it was determined that a settlement without admitting any wrongdoing would allow the company to focus on current and future operations without further distraction," Fisher says.
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