(Update includes quote from Sysco and updated share price.)
By Everdeen Mason
A Sysco Corp. (SYY) unit has agreed to pay a $4.2 million
settlement for allegedly overcharging the Department of Defense on
several fruit and vegetable contracts over three years.
FreshPoint Inc., a food distribution company, is accused of
inflating its prices to the government based on its market
estimates, violating the terms of 15 separate contracts from
December 2007 through September 2011.
"While settling with the U.S. Attorney General does not
constitute an admission of liability, in the spirit of cooperation
and the desire to bring the matter to a conclusion, FreshPoint
agreed to settle the matter and move forward," the company
said.
A former FreshPoint employee, Charles Hall, filed the lawsuit on
behalf of the government through the whistleblower provisions of
the False Claims Act and will receive $798,000.
"This settlement demonstrates one of the many types of fraud
inflicted upon the American taxpayers," said Edward Tarver, U.S.
attorney for the Southern District of Georgia.
Sysco's shares were down 11 cents to $33.52 in late trading, and
up 5.9% year-to-date.
Write to Everdeen Mason at everdeen.mason@wsj.com
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