Fuel Delivery Company Allegedly Sold Petroleum Diesel Fuel But Charged For Biodiesel

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  • Massachusetts AG Maura Healey reached a settlement with fuel delivery company Diesel Direct, LLC and related individuals (collectively “Diesel Direct”) to resolve allegations that it delivered nonconforming diesel fuel products to state agencies, overcharged state agencies for fuel delivery, and did not fulfill contract diversity requirements in violation of the Massachusetts False Claims Act.
  • According to the AG’s office, the complaint brought by a whistleblower alleged that Diesel Direct delivered petroleum diesel fuel to state agencies, while charging these agencies the higher rates applicable to biodiesel. The complaint further alleged that Diesel Direct overcharged state agencies by improperly charging a federal fuel excise tax and by using an incorrect higher benchmark price to determine its per-gallon price. In addition, the complaint alleged that Diesel Direct failed to spend two percent of its contract-generated sales with diverse businesses, as required by the contract.
  • Under the terms of the settlement, Diesel Direct will pay $850,000 to the state. Diesel Direct will also be precluded from bidding or otherwise participating in any contract with the state or any state agency for five years.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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