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Vending machine contractor reaches settlement with state over fraud claims

Black Tie Services paid more than $370,000 to settle claims alleging the Baltimore vending machine company underpaid on contracts with an employment services agency for disabled workers, state officials said recently.

The Maryland Attorney General’s office said it reached a settlement with Black Tie, which the state said failed to pay money owed to the Maryland Randolph-Sheppard Program. Randolph-Sheppard offers jobs to blind workers to run cafeterias and snack shops on government properties.

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Black Tie had numerous contracts to operate vending machines on behalf of the Randolph-Sheppard program that required Black Tie to pay the program a share of sales revenue. The Attorney General’s office alleged that Black Tie submitted misleading reports that understated goods sold and revenue earned and failed to pay the program all amounts owed. Black Tie has agreed to pay $370,660.

“We alleged that Black Tie siphoned hundreds of thousands of dollars from programs that Randolph-Sheppard runs for the benefit of blind members of our community,” said Brian E. Frosh, Maryland Attorney General, said in the Sept. 28 announcement.

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Black Tie couldn’t be reached for comment.

Frosh said the recovered funds will be returned to the program.

This settlement was reached under the False Claims Act of 2015, an anti-fraud tool allowing governments to address fraud in contracts or grants. The law imposes penalties on anyone who submits false or fraudulent claims for payment to a government entity or in connection with a government-funded project or fails to pay money owed to the government.

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