Diesel Direct, LLC and two of its executives paid the Commonwealth of Massachusetts $850,000 to settle allegations that they violated the Massachusetts False Claims Act. In addition to the $850,000 payment, Diesel Direct has agreed not to bid on any contract with the state or its agencies for five years.
Our client brought the fraud to the state’s attention by filing a qui tam complaint under the Massachusetts False Claims Act. The lawsuit alleged that Diesel Direct, LLC and two executives violated the False Claims Act by knowingly delivering nonconforming petroleum diesel fuel to state agencies while charging for a higher-priced and more environmentally-friendly Biodiesel fuel.
Biodiesel is a renewable fuel that reduces particulate matter and tailpipe emissions that contribute to global warming. It is nontoxic, biodegradable, and suitable for sensitive environments. As a result, spills are far less harmful and much less expensive to clean up than a petroleum diesel spill.
Our client’s lawsuit alleged that when state agencies ordered Biodiesel fuel from Diesel Direct, the company instead delivered nonconforming petroleum diesel fuel, which does not have the environmental benefits of Biodiesel. Yet, Diesel Direct charged the state agency for the more expensive Biodiesel. As a result, our client alleged that Diesel Direct not only overcharged state agencies, but also caused them to consume fuel that emitted greater greenhouse gases and particulate matter into the atmosphere. After a two-year investigation, the Massachusetts Attorney General’s Office intervened in the lawsuit and resolved the claims in this settlement.
As Massachusetts Attorney General Maura Healey noted:
By not delivering on the terms of its contracts, this company bilked Massachusetts out of taxpayer dollars and undermined our efforts to reduce harmful emissions.
The settlement also resolves allegations that Diesel Direct improperly charged state agencies in other ways and failed to spend two percent of its contract-based sales with minority-, women-, and/or service disabled veteran owned business enterprises as it was required to do.
Our courageous client brought the fraud to the attention of the government by filing a qui tam complaint under the Massachusetts False Claims Act. Under this law, a private citizen (known as a “relator”) who suspects or knows of fraud against the government can act as a whistleblower and file a sealed complaint on behalf of the government. If the case is successful, as here, the relator is entitled to a share of the government’s recovery.