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Boston — A New Jersey-based corporation will pay nearly $2 million to settle allegations that it overbilled for cleaning supplies it sold under contracts with the Massachusetts Port Authority (Massport) and the Executive Office for Administration and Finance’s Operational Services Division (OSD), Attorney General Maura Healey announced today.
The Assurance of Discontinuance, filed today in Suffolk Superior Court, resolves allegations that Interline Brands violated the Massachusetts False Claims Act and Consumer Protection Act by overcharging for janitorial supplies and submitting quarterly reports to OSD that misrepresented its pricing methodology.
“This company recklessly overbilled for cleaning products, costing the state hundreds of thousands of dollars,” said AG Healey. “State vendors who cheat the public will be held accountable and we are glad to have recovered nearly $2 million from this company as part of our resolution.”
The AG’s Office alleges that Interline violated the terms of its 2008 and 2014 contracts with Massport by overbilling for items whose prices were fixed by contract and failing to cap its mark-up on other items in accordance with the contracts, resulting in hundreds of thousands of dollars of overcharges to Massport. The AG’s Office further alleges that Interline violated the terms of a statewide contract administered by OSD by, among other things, exceeding the contractually allowed mark-up on certain non-stock items, failing to price items in accordance with the discount pricing methodology to which it agreed, and misrepresenting its pricing methodology in its quarterly reports to OSD.
The case leading to today’s settlement began with a complaint to the Massachusetts Inspector General’s (IG) Office and led to an investigation by IG’s Office that revealed that Interline had overbilled Massport for a wide array of janitorial products for several years. The IG’s Office and the AG’s Office then conducted a joint investigation that resulted in today’s settlement.
“This $2 million settlement resulted from an individual literally walking in our front door with information about possible misconduct,” said Massachusetts Inspector General Glenn A. Cunha. “This is another example of our office working with the Attorney General to recover a significant amount of money for public entities that have been harmed financially.”
Under the terms of today’s settlement, the AG’s Office will return $958,000 in damages to Massport and over $22,000 to entities that were over-billed under OSD contract. The IG’s Office will receive $60,000 from the settlement to defray the costs associated with its investigation. The balance will go to the state’s general fund.
“We would like to thank both Attorney General Maura Healey’s Office and Inspector General Glenn Cunha’s Office for their dedication to correcting this matter,” said Massport CEO Thomas P. Glynn. “We are pleased to have a resolution that makes Massport whole for our losses.”
“The Operational Services Division takes our responsibility to spend taxpayer dollars seriously, and holds the vendors doing business with the state to a high standard,” said Assistant Secretary for Operational Services Gary Lambert. “I am appreciative of the work the Attorney General’s office, Inspector General’s office, and the OSD legal team did to see this matter resolved.”
Today’s settlement also requires Interline to implement business practice changes to address the issues uncovered by the investigation.
This matter was handled by Gillian Feiner, Chief of AG Healey’s False Claims Division, and Julia Walsh, a Legal Analyst in AG Healey’s False Claims Division with assistance from the Audit, Oversight and Investigations Division of the Inspector General’s Office, including Director Eileen O’Brien, Senior Counsel John Brooks, Deputy Director George Xenakis, and Senior Investigator Daniel M. O’Neil, and with full cooperation and support from the Massachusetts Port Authority.