HP pays $55m to settle US fraud case

Dylan Bushell-Embling
31 Aug 2010

HP has agreed to pay $55 million to settle a US Department of Justice (DoJ) investigation into allegations of fraud and kickbacks.

HP had been accused of bribing system integrators to recommend US government agencies purchase its products, and of providing incomplete information to the General Services Administration (GSA) in 2002.

“Contractors must deal fairly with the government when doing business with federal agencies,” Tony West, DoJ's assistant attorney general for its civil division, said in a statement.

“As this case demonstrates, we will take action against those who seek to taint the government procurement process with illegal kickbacks.”

The investigation was prompted by a whistleblower lawsuit in 2004.

HP had been required in 2002 to provide the GSA with data on its operations which the agency later used as a benchmark for negotiate prices for government customers.

But HP told the GSA in 2007 that it might not have fully complied with the disclosure provisions. After an audit by the GSA's inspector general, the contract was deemed to be defectively priced.

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