IBM to Pay $17 Million for Alleged Discriminatory DEI Practices

IBM to Pay $17 Million for Alleged Discriminatory DEI Practices

On April 10, acting Attorney General Todd Blanche announced the first resolution under the Civil Rights Fraud Initiative, previously launched in May 2025. International Business Machines Corporation (IBM) agreed to pay $17,077,043 to resolve allegations that it violated the False Claims Act by failing to comply with anti-discrimination requirements in its federal contracts. The government alleged that IBM discriminated against employees and applicants based on race, color, national origin, or sex through several practices, including: tying bonus compensation to demographic targets, altering interview criteria based on race or sex through the use of “diverse interview slates,” setting demographic goals for business units, and restricting access to certain training and development programs based on race or sex.

Most federal contracts require contractors to certify that they will not discriminate in employment decisions and ensure that they will not discriminate against an employee or applicant based on protected characteristics such as race, color, national origin, or sex. The government alleges that IBM knowingly maintained practices that violated these requirements and maintained discriminatory employment practices. The government acknowledged that IBM cooperated with the investigation by making early factual disclosures and undertaking voluntary remedial measures, including terminating or modifying the programs and practices at issue.

Read ArentFox Schiff’s alert on the IBM settlement here.

Read the US Department of Justice’s (DOJ) settlement here.

Florida Nursing Assistant Sentenced to Nine Years in Prison for Health Care Fraud Scheme

Christian Cruz, a Florida nursing assistant from Pompano Beach, was sentenced to nine years in prison and two years of supervised release for his role in an $11.4 million health care fraud and wire fraud conspiracy. Cruz was also ordered to pay $3,712,345.70 in restitution and $724,871 in forfeiture. The sentencing follows Cruz’s January conviction for one count of conspiracy to commit health care fraud and wire fraud, four counts of health care fraud, one count of conspiracy to defraud the United States and to make false statements relating to health care matters, and three counts of structuring.

According to court documents, Cruz owned and operated a durable medical equipment supplier in Florida through which he submitted millions of dollars in false claims to Medicare for medically unnecessary orthotic braces. Cruz and his co-conspirator, a convicted felon, paid illegal kickbacks and bribes to obtain signed doctors’ orders, which they used to ship orthotic braces to Medicare beneficiaries nationwide who neither requested nor needed them, and then claimed payment from Medicare. Cruz also received several hundred thousand dollars to his personal bank account from the scheme, which he frequently withdrew in cash amounts just under the reporting threshold of $10,000.

Cruz lied to Medicare by claiming he was the sole owner and operator of the company, concealing his co-conspirator’s shared ownership. His co-conspirator’s status as a person who has been previously convicted of a felony would have prohibited Cruz from enrolling the company in Medicare. 

Read the DOJ’s press release here.

Michigan Man Charged With $5 Million PPP Fraud

In one of the first actions stemming from the government’s Task Force to Eliminate Fraud, Michigan man Randon Williams was arrested and charged for wire fraud and money laundering. According to the complaint, Williams was accused of defrauding financial institutions and the US Small Business Administration for over $5 million.

The complaint alleges that between approximately April 2020 and March 2021, Williams submitted six fraudulent Paycheck Protection Program (PPP) loan applications seeking more than $5 million in loans on behalf of businesses that either existed only on paper or whose applications materially inflated employee headcounts, payroll expenses, and gross receipts. According to investigators, Williams claimed that businesses such as “The Romero Group” and “Step Ladder Construction” employed between 21 and 75 individuals with monthly payroll exceeding half a million dollars. Williams also allegedly submitted falsified tax documents to support the loan applications.

Read the DOJ’s press release here.