FreshPoint Inc. pays $4.2M to settle false claims allegations - WTOC-TV: Savannah, Beaufort, SC, News, Weather & Sports

FreshPoint Inc. pays $4.2M to settle false claims

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SAVANNAH, GA (WTOC) -

FreshPoint Inc. has paid the United States $4.2 million to settle allegations that it submitted false claims in connection with the sales of fresh fruit and vegetables to the U.S. Dept.  of Defense and other Department of Defense customers.

The company is a wholly owned subsidiary of Sysco Corp. The settlement stems from allegations that during Dec. 17, 2007 to Sept. 11, 2009, FreshPoint over charged the federal government on thousands of sales by improperly adding random price mark-ups known as "marketing earned income" or "MEI" to invoices submitted by FreshPoint to the Department of Defense. 

The invoices in question were submitted as part of a contract for the company to supply fresh fruit and vegetables to the defense department, which includes soldiers. 

MEI was added to bring the price of those fresh fruits and vegetables to the perceived market value and violated the contract, according to a news release from the U.S. Attorney's Office for the Southern District of Georgia.

The civil settlement that was announced this week resolves allegations against FreshPoint and Sysco that were originally part of whistleblower lawsuit, filed by Charles Hall, a former FreshPoint employee, according to the news release. 

Hall will receive part of the settlement, as outlined in the qui tam provisions of the False Claims Act.

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