New York Settles School Food Services Fraud Case For $20 Million

On July 21, 2010, New York Attorney General Andrew M. Cuomo announced that the State had reached a $20 million settlement with Sodexo, one of the world’s largest food services companies, to resolve allegations that the company violated the New York False Claims Act by overcharging New York schools.  The State’s lawsuit asserted that for approximately 5 years Sodexo overcharged New York school districts and the SUNY system for food services by failing to pass significant rebates Sodexo received from its food suppliers, as required by the State’s child nutrition programs and the National School Lunch Program.

The qui tam case was brought on behalf of New York by whistleblowers that were former Sodexo employees.  The settlement is the largest monetary recovery for a case brought under the New York False Claims Act that did not involve Medicaid Funds.  As a reward for disclosing Sodexo’s fraud, the whistleblowers received a $3.6 million share of the settlement.

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