New York Attorney General’s “Taxpayer Protection Bureau” Recovers $1.6 Million in School Lunch Overpayments

New York State Attorney General Eric T. Schneiderman announced last week that the state has reached a settlement with food service provider Whitsons Culinary Group for illegally overcharging school districts and other education providers.  Whitsons received savings from food vendors it worked with, but did not pass on those savings to customer schools, resulting in more than $800,000 in illegal charges. The company must now pay $1.6 million to the state and affected school districts, and comply with a series of reforms to improve transparency in its contracting and service.

The investigation that led to the settlement was the first undertaken by Attorney General Schneiderman’s new “Taxpayer Protection Bureau,” which was established in January to root out fraud and misuse of taxpayer dollars.  The case was pursued under the New York False Claims Act, which, due to the efforts of Attorney General Schneiderman while he was a state senator, allow the state to collect triple damages and between $6,000 and $12,000 per violation from corporations or people who defraud the government, or violate their obligations to pay government entities.

“These are difficult financial times for New Yorkers and our state. For a company to profit off of sweetheart deals while overcharging our schools is simply unconscionable,” said Attorney General Schneiderman. “Recovering taxpayer dollars is exactly what the Taxpayer Protection Bureau was established to do – and today’s announcement sends a clear message that those who seek to defraud New York taxpayers will be held accountable. On behalf of students, parents and taxpayers, we are pleased that these schools will get their money back, and that Whitsons will no longer be able to siphon funds meant to benefit students.”