Catering giant Sodexo has agreed to pay a $20m (£13m) settlement with New York State over claims it overcharged 21 New York schools districts as well as the State University of New York (SUNY).
A state investigation found that the French firm had overcharged schools for five years bewteen 2004 and 2009 by not acknowledging rebates from suppliers.
The investigation, led by state Attorney General Andrew Cuomo's office, began when two former Sodexo employees came forward under the New York False Claims Acts, which protects whistleblowers from reprisal.
"This company cut sweetheart deals with suppliers and then denied taxpayer-supported schools the benefits," Cuomo said in a statement.
The settlement, part of an ongoing industry-wide investigation, was unsealed in federal court in Massachusetts on Tuesday.
By Janie Stamford
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