Consumer News

California company ordered to pay $132,000 for falsely billing Kansas state and local governments

TOPEKA – (March 26, 2014) – A California company has been ordered to pay a $132,000 civil penalty for sending false invoices to Kansas state agencies and local governments, Kansas Attorney General Derek Schmidt said today.

UST Development, Inc., doing business as US-Telecom, Inc., was ordered to pay the penalty by Shawnee County District Judge Franklin Theis in a default judgment entered last week. Theis found that the company violated the Kansas False Claims Act by sending at least 12 invoices to various state agencies and local governments for a “telecom maintenance agreement.” None of the agencies that received these invoices had any previous dealings or contact with the company prior to receiving the invoice. The invoices were sent in early 2012.

“Falsely billing government agencies in an attempt to defraud Kansas taxpayers is a serious violation of the law,” Schmidt said. “We take seriously our responsibility to guard the public treasury.”

The agencies that received these invoices included the Kansas Governor’s Office, Department of Social and Rehabilitation Services (now known as the Department for Children and Families), Douglas County, Seaman School District, Ashland School District and the Community Health Center of Southeast Kansas.

Schmidt filed a lawsuit against the company in October 2013, resulting in the judgment entered last week.