Hewlett-Packard Settles Fraud Investigation Case For $16.3m

Technology corporation Hewlett-Packard (HP) have reportedly paid out $16.3 million to settle a federal government fraud investigation lawsuit.

In the lawsuit and subsequent federal investigation, HP is accused of acting fraudulently in its involvement with the government’s E-Rate scheme for schools, which funds educational facilities in poorer areas with Internet connections.

It is alleged that HP and contractors working with the corporation lavished gifts – such as yacht trips, Super Bowl tickets and other expensive gifts – on independent school district personnel in Dallas and Houston in order to win E-Rate contracts.

Even though E-Rate contracts are supposed to be won through a competitive bidding process, it is claimed that HP used their ‘bribes’ to uncover insider information and win contracts worth an estimated $17 million. These contracts and the price paid for them took the form of HP equipment supplied to schools.

In order to settle the case and end the investigation, Hewlett-Packard has now paid back $16.3 million to the E-Rate programme in Dallas and Houston. It is not known whether the corporation had any sort of professional insurance in place for fraud – most companies rely on professional indemnity insurance for these kinds of errors and misjudgements – in order to cover the settlement.

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