Man gets $6M award
The man who exposed fraudulent practices at what was formerly one of the country’s largest providers of government background checks got $6 million richer last week, 4½ years after he first came forward about the scheme.
But that whistle-blowing action would cost Blake Percival his job with U.S. Investigative Services, drain his bank account, and, ultimately, his lawyers claim, make him one of the most significant whistle-blowers in recent history.
It’s a story years in the making — as Percival’s legal claim languished in federal court, and he and his family went from financial security in Western Pennsylvania to living paycheck-to-paycheck in their home state of Alabama.
The bottom line, Percival told The Washington Post last week, was that he refused to follow orders when his superiors at the company told him to “dump” incomplete background checks to meet internally-set production quotas.
The “dumping,” a process by which the company would fraudulently claim and electronically certify to have completed background investigations that were never done, began in March 2008 and continued until at least September 2012, according to a lawsuit against USIS filed by the federal government.
All-told, the company released at least 665,000 “dumped” background investigations — about 40 percent of the total investigations the company did during that four-year period — through its facilities in Grove City and Boyers.
It was into that scheme that Percival fell in January 2011, according to the False Claims Act lawsuit settled last week,
USIS promoted Percival, who had been working for the company since 2001, to director of fieldwork services and sent him to Western Pennsylvania, where he was given an office, oversight of 350 reviewers, and ordered to continue the dumping.
It is unclear which facility Percival worked out of while in Western Pennsylvania. Larry Golston, who led a team of lawyers representing Percival’s False Claims Act suit, said he believed Percival worked out of the Boyers facility.
Percival did not respond to multiple interview requests.
In his lawsuit, Percival said he refused to participate in the scheme despite being told by USIS executives over a period of months to learn how to fraudulently mark investigations as complete.
Percival’s refusals led to missed quotas and profits, and he was fired by USIS in June 2011, according to the lawsuit, which was filed on July 1, 2011. Percival and his family subsequently moved back to Montgomery, Ala., and Percival began working as a magistrate for the city.
In his interview with the Post, Percival said the following years would strip his bank account bare. He said he had about $54 to his name when the $6 million settlement was announced last Friday.
Percival’s suit was joined in 2013 by the U.S. Department of Justice, which cited internal USIS documents and e-mails detailing the dumping and showing how the scheme earned USIS nearly $12 million in bonuses from the government.
Last Friday, about 4½ years after Percival first filed his claim in federal court, Golston told him of the $6 million award.
Golston called it a “rewarding and enjoyable” moment, and his client one of the most important whistle-blowers in recent history.
“We’re talking about a company that did well over 90 percent of all the background checks for the federal government. They were literally put out of business because of what Mr. Percival brought to the government’s attention,” Golston said.
USIS no longer exists, but most of its employees were hired by other companies to provide the same or similar background check services. In October 2014 NT Concepts rehired about 900 former USIS employees and took over the Iron Mountain facility in Boyers. The facility received a $2 million state grant to help support 100 jobs later that month.
In spring 2014 USIS’ parent company, Altegrity, filed for bankruptcy, which made it much more difficult for both the government and Percival — who under the law was entitled to up to 30 percent of any money recovered by the government — to collect.
As part of the settlement, the company agreed to forego at least $30 million in legitimate government payments owed to USIS to settle the government’s allegations.
The company also acknowledged it was involved in botched background checks for Edward Snowden, who leaked NSA surveillance documents to the public, and for Aaron Alexis, a technology contractor who shot 12 people to death in a Washington Navy Yard last year.
Golston said those cases helped draw the company’s scheme into the spotlight and supported Percival’s allegations.
“Being a whistle-blower is not something Mr. Percival set out to do, but he felt compelled to do so,” Golston said. “A lot of times, the hardest thing is getting someone who knows something to speak up about it and tell what they know. Hopefully, this case will embolden others ... to come forward and tell their stories.”
