TOPEKA, Kan. (Legal Newsline) - Kansas Attorney General Derek Schmidt announced a settlement on Tuesday with a N.Y.-based chemical product company to settle a false claims case.
Royal Chemical Inc. allegedly billed treatment plants in Kansas for products that they did not order. The company has agreed to pay $50,155, which will be distributed to seven Kansas municipalities.
"This settlement recovers taxpayers' money taken through unfair and illegal business practices," Schmidt said. "We will continue to aggressively protect the interests of Kansas taxpayers."
The State alleged that sales representatives from Royal Chemical contacted city offices, making sales pitches for large quantities of product. When the cities denied the sales pitch, saying that their treatment plants were small and would never need that much product, the sales representative allegedly convinced the cities to agree to a small order or a free sample to test the product. After receiving the small order, Royal Chemical would allegedly ship large quantities of the product and aggressively try to collect for the product, even though the cities disputed the order.
The seven municipalities that will receive the settlement include the Galena Police Department, which will receive $832.85, the Stanton County Recreation Department, which will receive $7,580.59, the Jackson County Shop, which will receive $665.28, the city of Udall, which will receive $2,218.43, Elk County EMS, which will receive $632.52, the Eureka Fire Department, which will receive $227.81, and the Labette County Fire Department, which will receive $498.00.
The settlement is one of the first to be reached under the Kansas False Claims Act, which gives Schmidt's office the authority to file suit against entities or individuals that submit false or fraudulent claims for payment to the state of Kansas or any of its political subdivisions.