U.S. Investigations Services (USIS), the contractor who went bankrupt after losing its government contract to process security clearances, agreed to forgo at least $30 million in fees it said the government owed the company as part of a settlement with the Justice Department.

Justice and Altegrity, USIS’s parent company, came to this agreement in an effort to resolve False Claims Act allegations.

“This particular company failed to meet its obligations of comprehensively reviewing the backgrounds of current and prospective federal employees,” said Acting U.S. Attorney Vincent Cohen in a statement. “This settlement demonstrates our commitment to holding government contractors accountable.”

Justice announced the settlement Aug. 18 as part of a broader agreement that also resolves other matters between the government and USIS/Altegrity that were part of the bankruptcy proceeding. Under the deal, USIS now will not be held liable for claims it violated the False Claims Act. Altegrity filed for Chapter 11 bankruptcy protection in February.

Blake Percival, a former executive at USIS, blew the whistle about USIS’s alleged practice referred to internally as “dumping” or “flushing,” which involved releasing cases to OPM and representing them as complete when, in fact, not all the reports of investigations comprising those cases had received a contractually-required quality review. Percival’s share of the settlement hasn’t been decided.

The government contended that, relying upon USIS’ false representations, OPM issued payments and contract incentives to USIS that it would not otherwise have issued had OPM been aware that the background investigations had not gone through the quality review process required by the contracts.

The problems with how USIS managed the security clearance process came to light in January 2014 with the civil complaint levied by DoJ that the company submitted at least 665,000 background investigations to OPM that hadn’t been properly reviewed.

OPM first suspended USIS and later terminated its contract with the company in September.

In the wake of the incident, OPM decided to bring the final quality-review process for security clearances back in-house.

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