Wednesday, October 02, 2024

  



CRIMINAL CAPITALI$M

SAP, Carahsoft Probe Expanded to Work With Nearly 100 Agencies


Jake Bleiberg and Christina Kyriasoglou
Wed, October 2, 2024 at 3:43 PM MDT 4 min read


(Bloomberg) -- US prosecutors are broadening a probe of potential price-fixing by German software maker SAP SE and tech reseller Carahsoft Technology Corp., seeking to examine the companies’ work with almost 100 government agencies, according to new court records that show the scope of the investigation is far greater than previously known.

The Justice Department sent Carahsoft a legal demand for documents and information on 94 civilian government agencies with which it has done business for SAP products, according to a document filed in Baltimore federal court Tuesday. In it, the company characterized the prosecutors’ demand as “dramatically expanding” a civil probe that was already examining whether the companies overcharged the military and some other parts of government on purchases of more than $2 billion worth of SAP technology since 2014.

The investigation’s expanded reach across the US government, which hasn’t been previously reported, signals the depth of legal risk it poses to a top technology vendor and to Germany’s most valuable company. Many investigations end without any formal accusations of wrongdoing.

An SAP spokesperson, Joellen Perry, said the company and its US-based unit, SAP National Security Services, Inc., each received document demands from the Justice Department in August 2022 and have been cooperating with the civil investigation. The demands were “broad and seek documents relating to bidding and pricing practices by SAP and its resellers (including Carahsoft), but the information SAP has produced to date has been more narrowly focused,” Perry said.


A lawyer for Carahsoft, William Lawler III, declined to comment. On Tuesday, Lawler asked a judge to seal the records describing the expanded scope of the civil investigation, saying it included “several unsupported substantive allegations about Carahsoft and its business partners.”

A Justice Department spokesperson also declined to comment.

In June 2022, the Justice Department demanded information from Carahsoft about whether the company and SAP overcharged the US government by making false statements to the Department of Defense, according to court records. Investigators later asked Carahsoft to hand over records related to the Department of Agriculture, Department of Labor, Office of Personnel Management and the Centers for Disease Control and Prevention, Lawler wrote in the Tuesday court filing. The company declined because doing so would cause it to miss a deadline to produce the other records, he said.

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