Hewlett-Packard to pay $55m to settle US fraud charges

Hewlett-Packard Hewlett-Packard was accused of defrauding the US government's chief procurement body

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Computer giant Hewlett-Packard (HP) has agreed to pay $55m (£35.5m) to settle claims it paid kickbacks in relation to US government contracts.

HP was accused of paying other companies so they would recommend HP products to government buyers.

The government's chief procurement body, the GSA, entered into a contract with HP in 2002.

It is thought to be one of the largest such settlement figures achieved by the US Department of Justice.

The claims were first made in a lawsuit by two whistleblowers in 2004.

The settlement also resolves allegations that the 2002 contract over computer equipment and software was wrongly priced because HP provided incomplete information to the GSA.

A spokesman for the US Department of Justice said the the government would always take action against companies seeking "to taint the government procurement process with illegal kickbacks".

''Contractors must deal fairly with the government when doing business with federal agencies," he added.

HP said the size of the payout would affect earnings on its shares.

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