Oregon Files False Statements and Racketeering Lawsuit Against Company for Failed Health Care Exchange Site

On Friday, August 22nd, the state of Oregon filed a racketing lawsuit against Oracle America, Inc, and several of the technology company’s executes, which included charges of racketeering, false statements, and fraud, over failed health care exchange site.

Oregon Attorney General Ellen Rosenblum filed a 126-page racketeering and fraud lawsuit in Marion County court, alleging that Oracle fraudulently induced the state and its health care exchange, Cover Oregon, into hundreds of millions of dollars of contracts for a health care website that failed to work. Cover Oregon failed to sign up one single Oregon resident through the website.

“Over the course of our investigation, it became abundantly clear that Oracle repeatedly lied and defrauded the state. Through this legal action, we intend to make our state whole, and make sure taxpayers aren’t left holding the bag,” Rosenblum said in a statement.

Oregon spent $240 million in contracts with Oracle for the exchange site; Rosenblum claims that the state lost $420 million due to the faulty website. She is asking for $5.5 billion to be awarded to the state of Oregon in the racketeering charges.

However, Oracle has already counter-sued Oregon for $23 million that the company claims the state owes it for its services.

“The lawsuit filed today against Oracle by the Attorney General of Oregon is a desperate attempt to deflect blame from Cover Oregon and the Governor for their failures to manage a complex IT project. The complaint is a fictional account of the Oregon Healthcare Project.  Oracle is confident that the truth — and Oracle — will prevail in this action and the one filed by Oracle against Cover Oregon two weeks ago in federal court,” a spokeswoman for the California-based company said.

The racketeering lawsuit charges stem at least in part from whistleblower information from inside the company. An independent review of Oracle’s website design in October 2013, when the site launched ahead of open enrollment for the Affordable Care Act, said that the health care exchange site “does not meet industry standards.”

“The cost of Oracle’s lies and appalling work is extraordinary,” the racketeering and fraud complaint says. “The State has and will spend tens of millions more fixing or compensating for Oracle’s failures, including millions of dollars to process paper applications, to create a manual enrollment and insurance eligibility determination process, to transition to the federal health exchange, to fix Medicaid enrollment, to independently assess and repair Oracle’s failures, and to connect to the federal exchange.”

The fraud and racketeering lawsuit also alleges that Oracle employees exaggerated the capabilities of their software as early as 2009, when Oregon began searching for a company that could help the state update its Department of Human Services computer systems.

The Strom Law Firm Can Help with Racketeering and Other RICO Charges

RICO charges involve the operation of an illegal business or enterprise, including a fraudulent scams, for an individual or entity’s personal profit. RICO cases are complex criminal cases.  They involve serious criminal charges and life altering potential consequences. The federal Racketeer Influenced and Corrupt Organizations Act (RICO) and similar state racketeering laws give the government a tremendous amount of power to go after those accused of racketeering.

For experienced RICO, fraud, false statements, and federal criminal charges defense attorneys who will fight for your rights and work to have your charges reduced or even dismissed, contact the attorneys at the Strom Law Firm, today. We offer free, confidential consultations so that you can discuss the facts of your case with impunity, in a safe environment. Do not hesitate to contact us. 803.252.4800.