TOPEKA – (September 20, 2011) – Kansas Attorney General Derek Schmidt today announced that his office has settled a false claims case against a New York-based company that provided chemical products to several local governments in Kansas. The company, Royal Chemical, Inc., has agreed to pay $50,155 to settle charges that the company billed the treatment plants for products they did not order.
“This settlement recovers taxpayers’ money taken through unfair and illegal business practices,” Schmidt said. “We will continue to aggressively protect the interests of Kansas taxpayers.”
The State alleged that sales representatives from Royal Chemical contacted city offices and made sales pitches for large quantities of product. After the cities denied the sales pitch – saying their treatment plants were small and would never need that much product – the sales representative would get the cities to agree to a free sample or small order to test the product. After receiving the small order, Royal Chemical would ship large quantities of product and aggressively tried to collect for the product, even though the cities disputed the orders.
A portion of the settlement funds will be distributed to seven Kansas municipalities to fully reimburse funds they paid to Royal Chemical:
- Galena Police Department - $832.85
- Stanton County Recreation Department - $7,580.59
- Jackson County Shop - $665.28
- City of Udall - $2,218.43
- Elk County EMS – $632.52
- Eureka Fire Department - $227.81
- Labette County Fire Department - $498.00
This settlement is one of the first to be reached under the Kansas False Claims Act, which gives the Attorney General’s Office authority to file suit against individuals or entities that submit false or fraudulent claims for payment to the State of Kansas or any of its political subdivisions.