Federal Contractor Misconduct Database (FCMD)

The federal government routinely awards contracts to companies with histories of misconduct, including contract fraud and other violations. POGO believes that providing this website will help to improve contracting decisions and increase public knowledge of how the government spends billions of taxpayer dollars each year. Read more…

Monacelli v. Gem Insurance Company, et al. (Bad Faith and Misrepresentation)

In December 1994, a lawsuit was filed against Health Net subsidiary Gem Insurance Company for bad faith and misrepresentation. The claims “arose from the rescission of their health insurance policy based on their alleged failure to disclose an X-ray, taken one year before the Plaintiffs filled out their insurance application, which revealed an undiagnosed mass on [the plaintiff’s] lung.” A jury ruling in 1997 awarded $16 million to the plaintiffs, however, an appeal and subsequent settlement in May 1998 reduced the damages to $3 million ($1 million in compensatory damages and $2 million in punitive damages). The court also awarded plaintiffs approximately $233,000 in attorneys’ fees and interest.

Misconduct Type
Enforcement Agency
Contracting Party
Court Type
Date of Settlement
Contractors Involved Penalty
Health Net, Inc. $3,233,000
Further Information Released
SEC 10-Q 10/24/2006

Federal Contractor Misconduct Database