Staples Pays United States $7.4 Million to Resolve False Claims Act Allegations

20 October 2005

Staples Contract and Commercial, a division of office products giant Staples, Inc., has paid the United States $7.4 million to settle allegations that it submitted false claims when it sold office supply products manufactured in countries not permitted by the Trade Agreements Act to United States government agencies, the Justice Department announced today.
The settlement resolves allegations that the Framingham, Massachusetts-based company sold products from countries that do not have reciprocal trade agreements with the U.S., such as China and Taiwan. Staples was required by its contract with the General Services Administration (GSA) to prevent such items from being offered for sale to U.S. government agencies.
"Federal contractors will be held accountable for their violations of procurement regulations," said Peter D. Keisler, assistant attorney general of the Justice Department's Civil Division. "This settlement is an example of the Department's determination to ensure that federal funds are protected from fraud and abuse."
This case was filed under the qui tam or whistleblower provisions of the False Claims Act by Safina Office Products and two of its executives, Edward Wilder and Robert Hsi Chou Lee, in the U.S. District Court for the District of Columbia in January 2003. Safina, Wilder and Lee will collectively receive $1.11 million of the total recovery as their statutory award. Under the whistleblower provisions of the False Claims Act, private parties can file an action on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant.
The settlement resulted from an investigation by the Civil Division of the Department of Justice, the U.S. Attorney's Office for the District of Columbia, and the GSA's Office of the Inspector General. Earlier this year, the Justice Department reached a $9.8 million settlement with Office Max, Inc. and a $4.75 million settlement with Office Depot, Inc. based on the same allegations.
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Source: U.S.Newswire

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