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Compaq serves $20m fraud lawsuit

Compaq has announced that it is to sue two US firms for more than $20m (£14.1m) over what it claims was fraud relating to product rebates and special marketing funds.

The company named Harry Martin and Shafiq Ahmad, the bosses of Millennium Technology, and Stephen Pridemore, the president of the South Carolina company the Creative Resources Group, in the action.

Compaq charges them with fraud, breach of contract and conspiracy and also seeks to reclaim interest, costs and attorney fees.

The lawsuit, filed in the US District Court for the Eastern District of Virginia, alleges that the companies falsely claimed to have large contracts with the US government.

According to Compaq, the two companies negotiated rebates and discounts as a prerequisite for fulfilling the contracts before selling the products through normal channels to non-government purchasers.

A statement from the company said it had taken the legal action to ensure the integrity of its products.

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