Office Depot, INVESTIGATIVE REPORTERS: Story Lead-Office Depot under investigation by ten agencies for fraudulent pricing on state and local government contracts. All States, Counties And Cities: Nationwide

REPORTERS LEAD:
Investigative Reporting (local and national news)
Office Depot has office and classroom supply contracts with states, counties, cities, school districts, and nonprofits in all 50 states.

News media in Florida, Texas, Missouri, Colorado, California and Michigan are currently covering this evolving story of corporate greed, fraud and kickbacks.

Office Depot inc., including its affiliates and/or agents, has engaged in deception, fraud, false promise, misrepresentation, unfair practices, and/or the concealment, suppression, or omission of material facts in connection with the sale of office products to state & local governmental entities and nonprofit or charitable entities, and such was done in conspiratorial concert with U.S. Communities its affiliates and/or agents thereof.

Current investigations at the State level by Attoreny Generals:
Florida
California
Texas
Ohio
Missouri
Colorado

Amount of alleged 'Bait & Switch' overcharging on the national U.S. Communities agreement:
$100 million or more in overcharges per year

Amount of kickbacks from Office Depot to U.S. Communities over 3 years:
$20 million in kickbacks +

Current fraud investigations of Office Depot's federal contracts:
Department of Justice (DOJ)
Department of Defense (DOD)
Department of Education (DOE)
General Services Administration (GSA)

News reports on the investigations:

NBC-TV
BAY AREA NEWS
news local-beat
Attorney General Investigating Office Depot
Company accused of overcharging public agencies, including Berkeley and San Francisco
By JACKSON WEST
Updated 4:23 PM PDT, Tue, Aug 4, 2009
Next time you think to complain about wasteful government spending, you might note that privateers sometimes try to profit from public contracts.

Office Depot is being investigated for widespread overbilling, and has already paid $2.5 million back to the State of California.

In Berkeley, an audit concluded that the company had overcharged the city for supplies, and has had to pay back $289,000.

A former employee is accusing the company in a civil suit of asking him to falsify records in order to coverup the excess money charged to Berkeley.

And the National Office Products Alliance, a trade association, has called on the state attorney general to investigate US Communities, a government purchasing cooperative based in Walnut Creek which does some business with Office Depot, over allegations that it has received $20 million in so-called "kickbacks." A representative of US Communities says the allegations are "baseless" and a "total misrepresentation" of the nonprofit's role in facilitating contracts.

Beyond California, Office Depot is being investigated in Florida, Missouri, Texas, Colorado, Ohio and by the nation's General Services Administration, the Department of Defense and Department of Education.

San Francisco is currently conducting its own audit, and is looking for a new office supply provider.

So much for assuming that big box shops like Office Depot always offer the best prices.

Attorney General Investigating Office Depot | NBC Bay Area
Aug 4, 2009 ... Company accused of overcharging public agencies, including Berkeley and San Francisco ... Beyond California, Office Depot is being investigated in Florida ... ink should be reason enough for a full federal investigation. ...
http://www.nbcbayarea.com/news/politics/... - - Cached - Similar pages

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I-Team Follow-Up: State AG putting Office Depot under microscope

NBC-TV-St. Louis By Leisa Zigman, I-Team Reporter

KSDK -- The I-Team has new information since its Office Depot investigation aired Monday night.

Missouri Attorney General Chris Koster has sent a civil investigative demand to Office Depot to determine whether the office supply giant has engaged in deception and fraud. The attorney general wants Office Depot to supply not only pricing documents, but specific details about charges to government entities and non-profits in 2006, 2007 and 2008.

Six states, including Missouri, have placed Office Depot under the microscope for allegedly overcharging government entities and nonprofits.

Koster and Missouri State Auditor Susan Montee want to know if Office Depot owes a refund to Missouri schools, churches, cities, towns and state offices.

The civil investigative demand sent to Office Depot states:

"The attorney general has information that Office Depot, inc., including its affiliates and/or agents, has engaged in deception, fraud, false promise, misrepresentation, unfair practices, and/or the concealment, suppression, or omission of material facts in connection with the sale of office products to Missouri government entities and nonprofit or charitable entities."

"We are willing to step into the shoes of local agencies and bring this action forward if fraud is found," Koster said.

Office Depot e-mailed the following reaction:

"While we intend to vigorously defend any allegations of wrong doing lodged against our company, we will fully cooperate with the Missouri Attorney General's Office, as we do in all government and regulatory inquires."

At issue is whether schools and government agencies agreed to do business with Office Depot at specific prices, but were switched to higher priced items without their consent or through deceit.

"These government contracts are effective in all 50 states," said David Sherwin, a former senior executive for Office Depot who handled government accounts. "Missouri, Illinois, Texas, Florida, North Carolina, California, and across the country. It's somewhere between one billion and 1.2 billion in contracts office depot receives every years."

Sherwin pointed out the alleged deception to his superiors. Office Depot fired Sherwin last April for what the company called workplace misconduct. He is now a whistle blower aiding Florida's attorney general in that state's investigation.

Office Depot calls Sherwin a "disgruntled employee whose negative campaign includes numerous false, misleading, and baseless allegations."

"If in fact the definition of disgruntled is an employee who refuses to take part in what he considers criminal activity, refuses to continue to take part in deceptive pricing practices resulting in over charging millions of dollars to government entities, then you betcha, I was disgruntled," Sherwin said.

The I-Team has confirmed that all investigations involving Office Depot are civil, not criminal.


KSDK

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Jul 6, 2009 11:52 am US/Mountain
Colorado AG Investigates Office Depot Pricing
Reporting
Rick Sallinger
DENVER (CBS4) ?
Office Depot may have been cheating school districts out of money. The company acknowledges it is under investigation by the Colorado attorney general's office.
The probe involves a major contract between Office Depot and the purchasing agent for public agencies in Colorado. Allegations have been made about "bait and switch" tactics on the pricing of items to institutions.
The company provides supplies to school districts in Colorado and throughout the country under a national contract negotiated through an organization called U.S. Communities.

The detailed criminal complaint was filed by a former Office Depot account manager David Sherwin. It states that the company engaged in trickery and deception, resulting in fraudulent overcharges.


"The state of Colorado is one of the 10 states that has been impacted the greatest in the United States," Sherwin said.
In North Carolina an audit found a $300,000 overcharge of state agencies. In California Office Depot paid $2.3 million to settle allegations of overcharges. Georgia terminated its $40 million contract after finding problems in pricing.
The Cherry Creek School District discovered irregularities in prices charged by Office Depot about a year and a half ago and has since resolved the issue.
In a statement to CBS4 the company wrote that it is aware with the Colorado attorney general's investigation and "will cooperate fully."
There is also a federal investigation. It is reportedly focused on purchases from Office Depot by the Department of Defense and the General Services Administration.


Colorado AG Investigates Office Depot Pricing - cbs4denver.com
Jul 6, 2009 ... Office Depot may have been cheating school districts out of money. The company acknowledges it is under investigation by the Colorado attorney general's office . ... Inside a Denver-area Office Depot store. CBS. Click to enlarge ... In a statement to CBS4 the company wrote that it is aware with the ...
http://cbs4denver.com/investigates/Offic... - 60k - Cached - Similar pages
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NOPA Reports California & Ohio Join Other States in Opening Investigations of Office Depot
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Business Wire 2009

2009-07-21 20:32:04 -


Office Depot has disclosed on its investor website : that the Attorneys General of California and Ohio have launched civil fraud investigations into its $700 million dollar U.S.
Communities national contract that thousands of local governments, school districts and public institutions draw upon to purchase office and school supplies. California and Ohio join Colorado, Florida, Missouri and Texas in opening such investigations
Former account manager in Office Depot's Business Solutions Division, David Sherwin, a protected whistle-blower in Florida where the company is headquartered, has been credited with the launching of the investigations.

Today, the National Office Products Alliance (NOPA) called upon the Office of the Attorney General of California to include in its investigation of Office Depot a thorough examination of the role played by the Walnut Creek, CA-based U.S. Communities organization which has allegedly received as much as $20 million in kickback payments from Office Depot for sponsoring the national contract now under investigation in six states.

California's Department of General Services recently ended its state-wide contract with Office Depot and negotiated a settlement agreement with the company for alleged overcharging. Other states, including Georgia, also have negotiated settlement agreements with the company within the past two years.

Additionally, the U.S. Departments of Defense and Education and the General Service Administration, with coordination from the U.S.

Department of Justice, are conducting their own investigations into Office Depot's handling of federal government office supplies contracts.

According to NOPA, these two new investigations again highlight the inherent problems associated with reliance on a single office supplies contracts by government agencies at all levels. Strategic sole-source contracting has damaged competitive independent small businesses around the country, reducing vendor choice and raising prices for government customers, said Chris Bates, President of NOPA. The idea that sole-source contracting offers a best value' proposition should be questioned by every federal, state and local government and institutional entity in light of the results from so many audits and investigations.


Taxpayer's watchdog
Fort Myers, Florida
U.S.A.

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