Lawson To Pay $30m In Kickback Case

Jason Sandefur

Lawson Products Inc. has agreed to pay $30 million as part of a deferred prosecution agreement in a “kickback” case that resulted in several convictions of former employees in 2007, the Associated Press reports.

Lawson, which generated nearly half of its $509 million in sales during 2007 from fasteners and related items, agreed to pay the penalty in three installments of $10 million over the next 24 months. The deal calls for the company’s mail fraud charge related to the case to be dropped in three years.

“We are confident we have taken the necessary actions and implemented the proper processes, oversight and programs so that such events are not repeated and we can continue to run our business with integrity,” stated Lawson executive vice president Neil Jenkins.

Lawson sales agents allegedly rewarded buyers with $10 million in goods over 13 years through several programs, court records indicate. The largest of the programs “funneled checks good for store purchases to the buyers while other programs let them pick rewards out of catalogues produced by Lawson, including consumer electronics such as stereos and DVD players,” writes Mike Robinson of AP.

Employees of companies that bought items from got the gifts if they bought more items and paid higher prices for them, according to federal prosecutors.

Seven Lawson sales agents and six others were charged in 2007, and all but one of them have since been convicted, according to AP.

Des Plaines, IL-based Lawson operates 16 distribution centers and a manufacturing plant – Automatic Screw Machine Products Co. of Decatur, AL. The company utilizes 1,700 independent sales reps to serve 377,000 customers in the U.S., Canada, Mexico, Puerto Rico and the UK.

All of Lawson’s maintenance products are distributed from eight facilities in Illinois, Nevada, Texas, Georgia and New Jersey, as well as Canada and England. Web: lawsonproducts.com �2008 FastenerNews.com