MANHATTAN (CN) – FHC Delaware overcharged customers, including the federal government, by $5.4 million, $2.7 million of it involving the National School Lunch Program, federal prosecutors say. The company eventually disclosed what it had done and is paying the money back, Uncle Sam says.
“Beginning in or about 1998, FHC began a program known as the ‘Volume Purchase Incentive’ (‘VPI’) program, under which it overcharged its customers, including its school district customers, for costs FHC did not incur in providing meals and related services to those customers,” according to the federal complaint. “Under FHC’s VPI program, FHC requested that its suppliers artificially inflate the prices they charged FHC for FHC’s food and product purchases, and send FHC invoices reflecting these artificially inflated prices.”
FHC ran its VPI program from 1998 to 2002, when Aramark acquired it, prosecutors say. In 2003, FHC “voluntarily disclosed to the United States its VPI program, and subsequently cooperated with the government’s investigation of that program. FHC has voluntarily returned to its former customers, including many of its school district customers, over 80 percent of the approximately $5.4 million in VPI amounts it received from those customers from 1998 to August 2002, and, upon information and belief, is in the process of reimbursing the remaining customers,” according to the complaint.
The federal government seeks damages for fraud, unjust enrichment and false claims.