WASHINGTON, July 25 /EMWNews/ -- W.W. Grainger Inc. has

paid the United States $6 million to settle allegations that it submitted

false claims to United States government agencies, the Justice Department

announced today. The company, based in Lake Forest, Ill., supplies

facilities, maintenance and other related products in North America.



    The settlement resolves allegations that the company sold government

agencies special order items at a markup greater than that allowed by

Grainger's contract with the General Services Administration (GSA). The

settlement also resolves allegations that Grainger sold government agencies

products from countries that do not have reciprocal trade agreements with

the U.S., such as China and Taiwan. Grainger was required by its contract

with the GSA and by the Trade Agreements Act to prevent such items from

being offered for sale to U.S. government agencies.



    "Federal contractors will be held accountable for their knowing

violations of procurement regulations," said Gregory G. Katsas, Assistant

Attorney General of the Department of Justice's Civil Division. "This

settlement is an example of the Department's determination to ensure that

federal funds are protected from fraud and abuse."



    The case was filed under the qui tam provisions of the False Claims Act

by Brian M. Holbrook, a former Grainger employee, in the U.S. District

Court for the Eastern District of Wisconsin in January 2006. Holbrook will

receive $70,400 of the total recovery as his statutory award. Under the qui

tam provisions of the False Claims Act, private parties can file an action

on behalf of the United States and receive a portion of the proceeds of a

settlement or judgment awarded against a defendant.



    "The Civil Division of the U.S. Attorney's Office is committed to

actively pursuing allegations of fraud by companies against government

agencies," said Steven M. Biskupic, U.S. Attorney for the Eastern District

of Wisconsin in Milwaukee. "This settlement is another example of the Civil

Division's continuing efforts to investigate and prosecute affirmative

civil matters."



    The settlement resulted from an investigation by the Justice

Department's Civil Division, the U.S. Attorney's Office for the Eastern

District of Wisconsin and GSA's Office of the Inspector General.