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BAKER & TAYLOR, INC. PAYS $3 MILLION TO SETTLE

WASHINGTON, D.C. -- Baker & Taylor, Inc., a nationwide book distributor with headquarters in Charlotte, North Carolina, has paid $3 million to settle allegations that the federal government was overcharged in its own direct book purchases as well as through purchases by local schools and libraries using federal funds. The settlement covers overcharges by Baker and Taylor after it was sold by its former parent company, W.R. Grace & Co.- Connecticut, in March, 1992. W.R. Grace did not participate in the settlement and remains a defendant in a pending lawsuit in the United States District Court for the Northern District of California for sales before March, 1992.

The lawsuit brought under the federal False Claims Act, seeks damages and penalties based on Baker & Taylor's contracts with "institutional" customers, in which the company agreed to provide discounts of around 40% on trade books, but then failed to provide the full discounts by mis-classifying trade titles into non-trade categories. Meanwhile, Baker & Taylor provided full trade discounts on the same books to retailers.

The State of California is a co-plaintiff in the suit and several additional states are seeking to intervene, claiming damages on behalf of their own schools and libraries. The suit was originally brought by two whistle blowers, Robert Costa, head librarian for the city of Richmond, Virginia, and Ronald Thornburg, a former Baker & Taylor sales representative.

David W. Ogden, Acting Assistant Attorney General in charge of the Civil Division, said that "the settlement demonstrates the United States' commitment to protecting federal funds from fraud and abuse."

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