Peterson Oil Service, Inc., a Worcester-based fuel company, agreed to pay $ 450,000 after knowingly delivering fuel to towns in Massachusetts that contained eight times the percentage of biodiesel by volume allowed in the state contract, said Attorney General Maura Healey on Wednesday.
According to Healey’s office, Peterson Oil violated the Massachusetts False Claims Act by accepting two statewide contracts over eight years and had no intention of supplying compliant heating oil.
Healey announced that abandonment insurance was filed in Suffolk Superior Court on Tuesday and resolved allegations that Peterson Oil was delivering fuel containing 40% more biodiesel by volume. The state contract does not allow more than 5%.
Several of the state entities that purchased oil from the company under the contracts encountered performance issues with their heating systems due to the high biodiesel content, Healey’s office said.
“Cities and towns relied on Peterson Oil to provide heating fuel according to its contract so they could stay warm, but instead received non-compliant fuel which caused problems for many heating systems,” he said. Healey said in a statement. “Those who accept taxpayer dollars to enter into contracts with our state have a duty to operate with integrity and fulfill those contracts.”
Healey also said Peterson Oil knowingly submitted false documents during state contracts, claiming it delivered compliant heating oil when it was not.
Under the abandonment insurance, Peterson agreed to pay $ 450,000 and improve his record keeping.
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