Peterson Oil Service, Inc, a Worcester fuel company, has agreed to pay $450,000 after knowingly delivering fuel to cities and towns in Massachusetts that contained eight times the percentage of biodiesel by volume that was permitted in the state’s contract, Attorney General Maura Healey said on Wednesday.
According to Healey’s office, Peterson Oil violated the Massachusetts False Claims Act when it agreed to two statewide contracts over eight years and had no intention of delivering compliant heating fuel.
Healey announced an assurance of discontinuance was entered in Suffolk Superior Court on Tuesday, and resolved the allegations that Peterson Oil delivered fuel that contained 40% more biodiesel by volume. The state contract allows for no more than 5%.
Several of the state entities that purchased oil from the company under the contracts experienced performance issues with their heating systems because of the high biodiesel content, Healey’s office said.
“Cities and towns relied on Peterson Oil to deliver heating fuel in accordance with its contract so they could stay warm, but they instead received noncompliant fuel that caused problems for many heating systems,” Healey said in a statement. “Those who accept taxpayer dollars to contract with our state have a duty to operate with integrity and fulfill those contracts.”
Healey also said that Peterson Oil knowingly submitted false documents over the course of the state contracts claiming it was delivering compliant heating oil when it wasn’t.
Under the terms of the assurance of discontinuance, Peterson agreed to pay $450,000 and improve its record keeping.