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Whistleblower sues Unisys
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April 9, 1998: 6:45 p.m. ET
Former engineer accuses company of inflating Navy computer contracts
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NEW YORK (CNNfn) - A former Unisys Corp. software engineer has filed a lawsuit against the company, alleging it sold the U.S. Navy millions of dollars in computers after convincing officials new systems would be cheaper than rewriting existing software.
Eric Gundacker, who worked at Unisys' Egan, Minn., plant, was fired by the company in company in 1994. The lawsuit was filed under the federal False Claims Act last year but remained under seal until last month. Details were released Thursday by Dale Nathan, an Egan, Minn., an attorney for Gundacker.
Nathan said the suit was originally filed in January 1996, but was kept under wraps while the government decided if it would join Nathan's claim or pursue its own case.
Nathan is accusing Unisys of defrauding the Navy by convincing them it would be too difficult to transfer files from a $1 million to a $20,000 system.
If his suit is successful, Nathan would receive a share of any award to the government.
In addition to Unisys, the lawsuit names Loral Corp. and Lockheed Martin Corp. as defendants. Unisys sold its defense businesses to Loral in 1995 and they were acquired by Lockheed when it bought Loral in 1996.
Unisys said it is confident there was no wrongdoing in the case and the lawsuit will be determined meritless.
"We believe we are indemnified under our agreement with Loral when they purchased our defense business. Gundacker has raised the same allegations in a civil action against Unisys and a court granted summary judgement for that case in 1996," the company said in a statement. Gundacker had sued for wrongful termination.
Nathan disputed the company's claim. saying the judge agreed Gundacker raised "serious allegations of fraud." The judge did not rule on those claims, Nathan said, in finding for the company. Gundacker currently is appealing that decision.
Nathan expects a decision within six months.
After investigating Gundacker's claims, the U.S. Attorney's office in Minneapolis decided against joining Gundacker as a plaintiff. However, Nathan said the government has said it might reconsider its decision if Gundacker's case can be further substantiated.
Unisys closed at 18 11/16 against 18 1/2 Wednesday. 
--by staff writer Cyrus Afzali
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