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U.S. Seeks $3 Million In Lawsuit Against Computer Software Firm

May 30, 1985

BOSTON (AP) _ A computer software firm inflated its bills for U.S. government contracts by including money spent for the home yard care and mortgage payments of its president and his wife, the U.S. attorney says.

The federal government filed suit Wednesday to recover about $3 million in damages and civil penalties from Systems Architects Inc. of Randolph, its president, George Pan, and his wife, Karen, U.S. Attorney William F. Weld said.

Mrs. Pan is the company’s assistant treasurer, Weld said.

Systems Architects Inc. fraudulently included home yard care and mortgage payments and such costs as home utility bills and personal clothing in billing the Defense Department and a dozen other federal agencies, Weld said.

Weld said all the defendants in the civil suit were convicted in criminal prosecution May 23, 1984, and George Pan was sentenced to jail.

His statement did not disclose if Pan served in jail or where the couple lived.

Systems Architect has a lawsuit filed Nov. 17, 1983 seeking $3.6 million in a contract dispute with the Defense Department pending before the Armed Services Board of Contract Appeal, said Theodore A. Barrone, the firm’s legal counsel.

″We’ve been informed the suit has been filed,″ said Barrone. ″No one has seen the complaint. Based on the information I’ve been given, it raises civil issues often arising out of the complicated government contract process. Such suits happen quite frequently.

″With respect to the suit just filed, it will be answered and litigated appropriately.″

Weld said in a statement the defendants and other senior SAI employees engaged in a ″variety of fraudulent practices ... to obtain excessive payments on″ federal contracts by inflating overhead expenses, using false accounting entries, including the Pans’ personal expenses.

The suit alleged the Pans also intentionally altered employee time records and made fictitious entries to inflate government bills.

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