By Jordan Graham, The Orange County Register
Orange County found itself $26 million richer last week after an international software company paid a settlement, ending a lawsuit in which the county alleged it had been defrauded of millions while trying to replace its automated property tax system.
The county announced Tuesday that it will drop its lawsuit against Tata Consultancy Services, a multinational information technology company based in Mumbai, India, and that the company will dismiss a cross-complaint.
County spokeswoman Jean Pasco said in a statement that it was the most money the county had won in a settlement in over two decades.
Orange County hired Tata for a two-year contract in 2008, eventually offering $6.4 million to replace an antiquated computer system used to generate annual property tax bills. But over the next five years, the company requested three extensions and an additional $10.9 million to complete the project, leading the county to terminate the contract and eventually accuse Tata of fraud in a 2013 lawsuit.
“The county alleged that Tata fraudulently induced the county into selecting Tata to develop the property tax system and then presented false claims in the form of invoices and reports, provided false and unachievable milestone completion dates, and intentionally understaffed the project to maximize profit,” Pasco wrote.
In response, Tata filed a cross-complaint against the county. The county’s case was set to go to trial Aug. 2, but the two sides entered mediation in late July and agreed on a settlement.
Tata spokesman Benjamin Trounson said Tuesday, “Both parties had asserted claims against each other, but neither admits any liability.”
But county officials are adamant that the software company tried to swindle it out of money, noting that “internal emails, obtained during discovery, revealed Tata employees ‘appearing to strategize as to how to mislead the county about the status of the property tax management system.’”
“We knew their system didn’t work because they lied about their capabilities,” Supervisor Shawn Nelson said in a statement. “They flat-out lied to us and I caught them.”
Orange County paid a total of $4,925,541 to Tata during its contract and another $10 million in legal fees while suing the company.
Supervisor Todd Spitzer said the settlement money would be used to finally purchase a new automated property tax system, but he did not know when that would happen.
“The lawsuit was about, ‘You caused so much damage to the county, that not only do you have to pay for the system you screwed up, but you have to pay for a new system,’” Spitzer said.
©2016 The Orange County Register (Santa Ana, Calif.) Distributed by Tribune Content Agency, LLC.
