Houston Texas Business Lawyer

Whistleblower Lawsuit Settled for $19 Million

Identifying fraud against the government is often best done by insiders working in businesses committing fraud schemes. Insider knowledge provides insight into how scams work and makes it possible for a strong case to be made regarding corruption and defrauding of taxpayer dollars. To encourage those who identify fraud in their place of business to come forward, incentives allow whistleblowers to keep a portion of money recovered through legal actions charging fraud against the government. children-snacks-1446375-m

One recent case reported on by the Washington Post arose from allegations of fraud in a school meals program. The largest food vendor for the district settled the case for $19 million. The company employee working for the vendor could receive as much as 30 percent of money recovered. A qui tam lawsuit is the process used by whistleblowers to come forward and allege wrongdoing under the False Claims Act. If you suspect you may have knowledge of fraudulent behavior costing the government money, contact a whistleblower attorney for assistance.

Whistleblower Brings Fraud in a School Meals Program to Light

The whistleblower was a former director of food services for Thompson Hospitality and Chartwells, two companies which had formed a joint venture to provide school meal service to public schools in the District of Columbia. The companies were managing the meal service since 2008. Before filing the qui tam lawsuit, the former director had filed a lawsuit with the school system alleging he was improperly terminated for raising red flags about mismanagement related to the meal delivery contract. His prior suit settled for $450,000.

The qui tam lawsuit alleged the company was mismanaging the school meals program, resulting in too little food being delivered, spoiled food being delivered, and food being delivered too late. Chartwells has been accused of providing substandard food in the past, most notably when students boycotted the school lunch program in Connecticut last year because of quality issues. In 2012, the parent company of Chartwells also paid $18 million to settle allegations against it in New York claiming the company had overcharged more than 36 districts by failing to pass along promised discounts.

When settling the most recent case in the District of Columbia, Chartwells and Thompson Hospitality did not admit wrongdoing or acknowledge the validity of the underlying allegations. A spokesperson said the company "denies any wrongdoing and has agreed to resolve the issues so that focus continues to be on nourishing the bodies, minds and spirit of students to pave the way for a lifetime of success and well-being." Any underlying issues with the food are allegedly caused by cost overruns, according to the company.

As part of the settlement, $14 million in credits and payments will be submitted to the school system and the other $5 million will go towards providing philanthropic support for initiatives like nonprofits promoting literacy and providing mentors and college scholarships. The money allegedly taken through fraud is going back to enrich the district- thanks to the whistleblower who came forward. The whistleblower will also get a portion of the money he helped the district to recover.