The largest payouts in the history of the U.S. Department of Justice’s largest criminal fraud case were made Friday for employees at Staples Corp. and its Staples Advantage stores, as the two companies settled federal charges related to the scheme.
The largest payout of $2,934,500 is to be made to Staples’s 2,800 employees in the United States and Canada.
The payout was approved by U.N. arbitration panels in New York City and San Francisco.
Staples agreed to pay the $2 billion to settle allegations that it falsified and concealed payroll data and withheld tax refunds and other income from its U. S. and Canadian subsidiaries.
The U.K.-based company, which had been accused by U S. authorities of engaging in an illegal tax scheme, agreed to a $500 million payment to settle criminal and civil fraud charges.
The government alleges that the scheme cost U.s. taxpayers $6.7 billion and left more than 2,000 employees jobless.
Staples will pay $2 million to the U,S.
Treasury Department to settle tax evasion charges related in part to its scheme.
A separate settlement agreement will pay the IRS more than $1.3 billion in refunds to employees who lost their jobs as a result of the scheme and who have filed lawsuits against Staples in the U.,S., and Canada, according to the government.
The payments were approved by the Us.
District Court for the Southern District of New York, which heard arguments Thursday.
U. N. tribunal officials said the payments were not legally binding, but that they were intended to compensate Staples employees and to “encourage the IRS to ensure that no employee is forced to choose between his or her livelihood and paying the penalties that are the result of his or she continuing to commit this criminal act.”
The U S government is seeking $1 billion in civil penalties and a $1-billion criminal conviction for the scheme, which it said included false pretenses and fraudulent accounting practices that led to millions of dollars in losses.
The Department of the Treasury said in a statement that the settlements with Staples and Staples Advantage are “the largest and most significant criminal civil penalties ever imposed on the Staples Group.”
The government also has agreed to compensate employees who worked for the companies between 2009 and 2017 and who lost money through fraud.
The department said the two payments would cover the majority of the more than 1,000 Staples employees who were affected.
Staples is not the only company to pay out in the $5 billion civil case.
Last year, Walmart agreed to $4.5 billion in damages in the largest civil case ever brought by the government in its ongoing crackdown on tax fraud.
Walmart said it would provide $2 in the first year and $1 in the second year to each of the employees who would have lost their livelihoods had the scheme been discovered and prosecuted.
Walmart also agreed to provide $1 million to each affected employee who was required to sign a form acknowledging that he or she was required by law to pay a civil penalty of $1,000 for each fraudulent withholding and $500 for each false claim of taxes.
Walmart and Staples also agreed not to make any payments to third parties or to use any personal information collected from the victims of the fraud or the IRS.
Walmart did not say how many of the 2,500 employees would have been impacted by the settlement.
Walmart spokesman Mark Biederman said the company will provide additional information about the settlement to the affected employees, including the names of those who would be eligible for the $1 and $2 checks.
He said the settlement “is the largest corporate penalty we’ve ever paid in a civil tax case.”
Attorney John McKay said the U S was “proud” to “make this important step toward making sure that our businesses and our employees are protected from future fraudulent schemes.”
The deal “has a strong deterrent effect for other companies to commit similar schemes,” he said.
In addition to paying $2-million to the IRS, Walmart will pay an additional $600,000 to the United Nations and the Office of the United Nation’s High Commissioner for Human Rights to help “develop and implement a system of accountability” for those who violate international human rights law, McKay said.
The deal with Staples will provide the company with $5.5 million to resolve civil and criminal fraud allegations related to its Staples scheme, according a statement from U. n.
The agency has filed civil lawsuits against the two large companies and has agreed in some cases to settle in exchange for the payment of $500,000 in tax liabilities, McKay added.
“We will continue to work with the IRS and the other partners to ensure this case does not impact our compliance efforts and our ability to recruit and retain top talent,” the statement said.
“Staples has been extremely cooperative with this case and has cooperated with the government and its investigation.
We look forward to seeing this case resolved