Worcester-based Peterson Oil has resolved allegations it violated the False Claims Act as part of a state contract.
The company agrees to pay $450,000 and improve record-keeping, according to the Attorney General Maura Healey’s office. The resolution came with an assurance of discontinuance entered at Suffolk Superior Court on Tuesday.
Peterson Oil entered two statewide contracts with Massachusetts’ Operational Services Division for delivery of heating fuel. The contracts allowed five percent biodiesel by volume.
The claims against Peterson Oil allege it delivered fuel that contained 40% or more biodiesel by volume.
Several state entities that purchased heating oil from the company heating system performance issues related to the high biodiesel content.
The Attorney General’s office also alleged that Peterson Oi knowingly submitted false documents over the course of its state contracts.
Along with paying $450,000, the agreement requires Peterson Oil to comply with all contractual and industry standards in future state contracts. It must also maintain records that the products it has delivered to its customers that comply with its contract requirements.