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Post date: May 7 2014

A.G. Schneiderman Announces $475,000 Settlement With Office Depot For Overcharging New York State And Local Entities

Investigation Found That Office Supply Company Violated Price Guarantees

Schneiderman: Corporations That Profit From Overcharging New York Taxpayers Will Be Held Accountable

NEW YORK – Attorney General Eric T. Schneiderman announced today a $475,000 settlement with one of the nation’s largest office supply companies, Office Depot, Inc., to resolve allegations that it improperly overcharged over 500 New York government entities, including state agencies, police and fire departments, schools and correctional facilities all over the state.

“By failing to honor their contract, Office Depot profited at the expense of New York taxpayers, local governments and state agencies,” said Attorney General Schneiderman. “At a time when municipalities across the state are struggling to meet tight budgets and fund critical services, my office will do everything in its power to ensure vendors honor their commitment to conduct fair and honest business with our communities.”

In 2008, when it entered into a contract with the Office of General Services (OGS) to sell office supplies to OGS customers, Office Depot promised it would offer those customers a price at least as low as the price at which it sold office supplies to the United States General Services Administration. The Attorney General’s investigation found that Office Depot had inadequate systems in place to ensure compliance with that promise and in fact overcharged the OGS customers by hundreds of thousands of dollars. 

As a result of the Attorney General’s settlement, every impacted OGS customer will receive a check from Office Depot reflecting 100% of the overcharged amount. The contract at issue expired in 2013, and Office Depot was not awarded a new OGS contract for office supplies.

The matter was investigated pursuant to the New York False Claims Act. As a state senator, Attorney General Schneiderman authored amendments to strengthen the False Claims Act. These enhancements, known as the Fraud Enforcement and Recovery Act, allow the state to collect triple damages and between $6,000 and $12,000 per violation from corporations or people who defraud the government, or violate their obligations to pay government entities.

The Attorney General's investigation of Office Depot was conducted by Senior Advisor and Special Counsel Nicholas Suplina, with assistance from Assistant Attorney General Bryan Kessler of the Taxpayer Protection Bureau and former Volunteer Attorney Inayat Hemani.  The Taxpayer Protection Bureau, led by Bureau Chief Thomas Teige Carroll and Deputy Bureau Chief Scott Spiegelman, is a unit of the Division of Criminal Justice, led by Executive Deputy Attorney General Kelly Donovan.

A copy of today’s settlement can be read here.

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