Hewlett-Packard to Pay $55 Million to Settle Justice Department Probe

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Hewlett-Packard Co. (HPQ) agreed to pay $55 million to settle a U.S. Justice Department probe alleging that the computer-making giant engaged in kickbacks and overcharged the public through a Government Service contract, the Justice Department said today. HP said four weeks ago that it'd reached a settlement with the Justice Department "in principle."

The settlement resolves a Justice Department claim that HP, among other things, overcharged the U.S. General Services Administration in a 2002 agreement to sell computer equipment and software to federal agencies, the Justice Department said in a statement.

A company spokeswoman referred to an Aug. 2 statement from HP saying that its fiscal third-quarter earnings would be cut by 2 cents a share because of a "settlement agreement in principle" with the Justice Department. The company denied any illegal conduct and admitted no wrongdoing at the time.

Other companies that have reached similar settlement agreements with the Justice Department include IBM (IBM) and Computer Sciences Corp. (CSC), the Justice Department said today.

HP shares rose 56 cents, or 1.5%, to $38.56 in New York Stock Exchange trading today.
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