A former worker at a North Charleston manufacturer will be paid about $867,000 for saving taxpayer money after suing the company for overcharging an Army hospital.
Berchtold USA has agreed to pay the federal government $3.6 million to settle Beth Gorawski's lawsuit without admitting liability.
The complaint alleged the Hanahan Road business overcharged the government by about $736,000 on a $2.4 million sale of medical equipment.
Gorawski filed a federal whistleblower complaint against her former employer in September 2011, after raising questions about a 2010 sale to Brooke Army Medical Center in Texas. Her lawsuit remained sealed until last month.
Berchtold USA CEO Matt Weismiller signed the settlement agreement Jan. 21. He didn't respond to a request for comment Wednesday.
Gorawski worked for the company for less than six months. She was hired as a contract administrator in March 2011. She said she was terminated that August because of "her whistleblower complaints and reports," according to the 56-page complaint.
The price-gouging lawsuit centered on $2.4 million in operating tables and other surgical equipment Berchtold sold the San Antonio hospital in November 2010.
The case offers a glimpse into the complicated business of government contracting.
For vendors like Berchtold, one requirement is that they publish fixed prices for goods and services for a set period. The purpose is to make it simpler for federal agencies to buy what they need.
The published price in 2010 for the "Operon D 850" surgical table was $36,765 each. According to the lawsuit, Berchtold salesman Michael Ward submitted phony invoices to manipulate the procurement system, enabling the company to sell them for $54,000 apiece.
The purchase order included charges for a "Carbon Fiber Imaging Table Top Upgrade," which the whistleblower suit said "is a completely fake item."
Ward gloated about the sale in an email to Weismiller and seven other Berchtold managers on Nov. 4, 2010. He told one of the recipients to "enjoy the extra $522,000 in gravy" from the carbon fiber charges.
In a later email, Berchtold's Southwest sales director argued that Ward deserved a fatter commission because of $837,800 in "pure profit" he made on the hospital deal.
Ward was charged in April in an indictment that didn't identify the San Antonio medical center. Prosecutors only said he submitted a false rate quote in October 2010 that was "far in excess of the best pricing that Berchtold ... was required to provide the United States Government for such goods."
Ward pleaded guilty in January and could go to prison for five years. He hasn't been sentenced.
The company and seven individuals named in the whistleblower settlement, including Berchtold USA's CEO and German owner Theo Fritz, could still face criminal charges.Gorawski, who has moved to Utah, was awarded a $867,189 whistleblower payment from the government under the False Claims Act. The figure represents 20 percent of both the $3.6 million settlement and the $735,946 in excess charges.
She's also suing Berchtold for wrongful termination in a separate case. Her lawyer, Joe Griffith Jr., said she can't comment while the employment lawsuit is pending.
Berchtold is taking a Washington, D.C., law firm to court over the matter. The company alleges it received erroneous legal advice about the way the purchase order was structured.