Former Employee Alleged that Federal Contractor Lied About Completeness of Its High-Level Investigations
WASHINGTON, D.C. (April 11, 2022) — Whistleblower Julie Reed will receive a 29 percent share of a payment to the U.S. government that resolves her claims that a federal contractor, KeyPoint Government Solutions, defrauded taxpayers and endangered national security by failing to conduct proper high-level security clearance investigations.
Ms. Reed’s share of the settlement amount — close to the statutory maximum of 30 percent — was set by the U.S. Department of Justice as a reward for her significant contribution to the case over its eight-year lifespan. The amount of the payout wasn’t disclosed publicly; KeyPoint also agreed to pay an additional sum for her legal fees.
KeyPoint has changed ownership several times since Ms. Reed filed her original complaint; it is now called Peraton Risk Decision Inc. and is a subsidiary of Northern Virginia-based Peraton Inc., which is owned in turn by private-equity giant Veritas Capital. The long-running lawsuit included a two-year spell at the U.S. Court of Appeals for the Tenth Circuit, which granted Ms. Reed a favorable ruling and ordered the case to proceed.
In light of the settlement, a federal judge today dismissed Ms. Reed’s complaint in the U.S. District Court for the District of Colorado.
Ms. Reed was represented in the matter by The Employment Law Group® law firm and Mehri & Skalet, PLLC. She blew the whistle on KeyPoint, her former employer, by filing a complaint in January 2014 under the federal False Claims Act. The statute, originally signed into law by President Abraham Lincoln in 1863, makes it illegal to deceive the federal government for financial gain. The FCA includes a “qui tam” provision that allows whistleblowers to file a legal complaint on behalf of the government and — if they prevail — to receive a share of the proceeds.
In her complaint, Ms. Reed accused KeyPoint of misrepresenting its highest-level security clearance investigations, which she believes failed to meet strenuous government requirements. She described her growing concern, which she reported internally, that dozens of KeyPoint investigators were failing to report negative investigatory information — and that KeyPoint managers weren’t conducting reviews that would have caught such failures.
The settlement covers conduct by KeyPoint over a period of six years, from 2011 through 2016.
“Julie fully deserves this reward for her integrity,” said Janel Quinn, a principal of The Employment Law Group, one of the whistleblower attorneys who represented Ms. Reed. “She held KeyPoint accountable for delivering proper value to taxpayers, and she knew that the impact of substandard investigations wasn’t just financial — she was standing up for national security.”
“Being a whistleblower was never my aim, but it became my duty because of the oath I took to protect the public trust,” said Ms. Reed. “I continue to believe that KeyPoint and the United States Government have an obligation to protect access to classified information. When contractors like KeyPoint don’t take that responsibility seriously, it puts us all at risk. Unfortunately, the industry has failed to make improvements since 2016 and I fear there is additional wrongdoing yet to be discovered.”
“We are proud to have helped Julie in her battle to ensure the quality of security clearance investigations,” said Richard Condit, a partner at Mehri & Skalet who also represented Ms. Reed. “She spoke out to protect national security and feels it was her patriotic duty to do so. We hope that other whistleblowers will follow her example.”
United States ex rel. Reed v. KeyPoint Government Solutions
No. 1:14-cv-00004, U.S. District Court for the District of Colorado
Original complaint filed on January 2, 2014 (available here); second amended complaint filed on December 5, 2016 (available here)
Opinion from the U.S. Court of Appeals for the Tenth Circuit, where the case was docketed as No. 17-1379, delivered on April 30, 2019 (available here)
About The Employment Law Group
The Employment Law Group® law firm represents whistleblowers and other employees who stand up to wrongdoing in the workplace. Based in Washington, D.C., the firm takes cases nationwide.
About Mehri & Skalet
Mehri & Skalet, PLLC is a public-spirited law firm that pursues high-impact cases in areas ranging from civil rights to whistleblower protection to consumer protection. The firm is based in Washington, D.C.