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DoJ says IBM, PwC agree to settle kickback allegations

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BANGALORE, Aug 16 (Reuters) - IBM IBM.N and PriceWaterhouseCoopers [PWC.UL] agreed to pay about $5.29 million to settle charges of kickbacks for technology contracts with government agencies, the U.S. Department of Justice said on Thursday.

International Business Machines Corp. has agreed to pay about $2.97 million, while auditing firm PwC will pay about $2.32 million, the DoJ said in a statement.

The complaints were filed by Norman Rille and Neal Robert under the whistleblower provisions of the False Claims Act.

The provisions allow those who file successful complaints on fraud against the government to receive a share of the resulting recovery. Rille and Roberts will receive an amount to be determined in the near future, the department said.

PwC said the allegations were related to work performed by its former consulting business, since sold in October 2002.

“PwC believes that the allegations of the complaint characterizing conduct as ‘kickbacks’ are completely without merit ... but (the company) chose to settle the case, without any admission of wrongdoing, in order to avoid the expense, distraction and uncertainty of litigation,” spokesman David Nestor said in an e-mail to Reuters.

IBM could not immediately be reached for comment.

The DoJ said the actions were part of a larger ongoing investigation of government technology vendors and consultants that has already resulted in complaints being filed in Arkansas against Accenture Ltd. ACN.N, Hewlett-Packard Co. HPQ.N and Sun Microsystems Inc. SUNW.O.

(Reporting by Shikhar Balwani in Bangalore)

((Editing by Anil D’Silva and Anil Kumar; Reuters Messaging: shikhar.balwani.reuters.com@reuters.net; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800)) Keywords: UNITEDSTATES IBM/PWC

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