N.Y. Attorney General Settles School Lunch Case for $18M

Thursday, September 20, 2012

An $18 million settlement has been reached between New York and a food company that serves 39 school and public lunch programs statewide after an investigation into more than seven years of overcharges, Attorney General Eric Schneiderman said Wednesday.

The settlement with Compass Group USA Inc. requires that it repay almost $3 million to the schools for vendor rebates that by law should have been passed on, Schneiderman said. The state is expected to get about $15 million from damages and penalties under New York's False Claims Act.

"Compass improperly profited by overcharging New York's taxpayers and shortchanging our schools," Schneiderman said. "There are no excuses for this kind of misconduct."

Charlotte, N.C.-based Compass staffs and supplies food services at schools like Manhattan Day School and Schenectady City School District through its subsidiary, Chartwells.

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