Press Release  Worcester Fuel Company Resolves Claims It Knowingly Sold Noncompliant Heating Oil That Violated State Contracts

BOSTON — A Worcester fuel company will pay $450,000 and improve its record-keeping processes to resolve allegations it knowingly provided state entities noncompliant heating oil in violation of its contracts with the state’s Operational Services Division, Attorney General Maura Healey announced today.

The assurance of discontinuance, entered in Suffolk Superior Court, resolves allegations that Peterson Oil Service, Inc. (Peterson Oil) violated the Massachusetts False Claims Act when it entered into two statewide contracts, covering an eight-year period, with no intention of delivering compliant heating fuel. Instead, Peterson Oil regularly delivered fuel containing significantly more biodiesel by volume than the 5 percent allowed under the contracts.

During the course of its contracts with the state, Peterson Oil at times delivered fuel that contained 40 percent or more biodiesel by volume, more than eight times its limit allowed under the contract. Several of the state entities that purchased heating oil from the company under the contracts experienced performance issues with their heating systems because of the high biodiesel content.

“Cities and towns relied on Peterson Oil to deliver heating fuel in accordance with its contract so they could stay warm, but they instead received noncompliant fuel that caused problems for many heating systems,” AG Healey said. “Those who accept taxpayer dollars to contract with our state have a duty to operate with integrity and fulfill those contracts.”

The AG’s Office further alleges that Peterson Oil knowingly submitted false documents over the course of its state contracts claiming it was delivering compliant heating oil when, in fact, it had delivered noncompliant fuel.

Under the terms of the assurance of discontinuance, Peterson has agreed to pay $450,000. In the event that it contracts with the state or any state entity in the future, the company is obligated to comply with all applicable statutory, regulatory, and contractual provisions, including applicable industry standards governing the products it delivers. It is also required to maintain records that sufficiently show that the products it has delivered to its customers are in compliance with its contract requirements.

The False Claims Division was created by AG Healey to safeguard public funds and promote integrity and accountability in public contracting. AG Healey urges anyone with information about suspected fraud or abuse relating to state or municipal contracts or funds to contact the False Claims Division’s tip line at 617-963-2600.

This matter was handled by Assistant Attorney General Cassandra Arriaza and Legal Analyst Julia Walsh, with assistance from Division Chief Amy Crafts, all of the AG’s False Claims Division, as well as Edward Cherubin and Colleen Frost, both of AG Healey’s Civil Investigations Division.

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