Fraudulent heating costs charged to state and local governments in New York lead to False Claims Act Settlement
As regular readers know, one of the main goals of this blog is to cover and explore novel uses of state false claims acts. And no state ( to my knowledge) has made better use of its state false claims act than New York. You can read the settlement agreement here.
The relator’s lawyers boiled this complex fraud down to very simple terms. From 2004 to 2016, Bottini Fuel improperly held onto customer overpayments and duplicative payments for heating oil. Company officials didn’t tell customers that they had overpaid; instead, the company kept the money and used it to benefit its owners and employees.
It should come as no surprise to readers that the biggest victims of the scam were state and local governments. According to the settlement, the biggest victims include: the Taconic Developmental Disabilities Services Organization ($281,630), the Greenhaven Correctional Facility ($145,957), Roundout Valley Central School District ($83,044) and Beacon City School District ($10,375). A number of New York state towns received restitution, including Saugerties, Blooming Grove, Monroe, Hunter, Wappinger and Stanford.
As an interesting aside, according to the U.S. Energy Information Administration, about one-third of the heating oil purchased in the United States each year goes to commercial uses in the Northeast United States, and 84% of the heating oil purchased for residential use is purchased in the Northeast.
Criminal convictions and the New York FCA settlement
This particular 12-year scheme defrauded not only school districts, and local governments in New York’s Hudson Valley; interestingly, individuals and private businesses were also defrauded. The fraud resulted in a criminal plea agreement for Morgan Fuel & Heating Company, Inc., which conducts business as Bottini Fuel.
Congratulations again to the lawyers of Getnick & Getnick for this groundbreaking settlement!