The Pete’s Pizza chain, based in Chicago, has been the target of a lawsuit alleging its founder was paid millions of dollars for his pizza.
The lawsuit, filed in Cook County Circuit Court, alleges that the chain was “a highly profitable company” and had “an aggressive marketing strategy,” but also claimed that the company “failed to comply with its obligations under the False Claims Act.”
Pete’s Pizza claims it’s not liable under the Act, but it did have a legal position against the company when it was acquired by Petco.
The chain was ordered to pay $2.5 million in penalties and was ordered by a judge to pay an additional $1 million to cover its liabilities.
The company also had an obligation under the act to make sure its employees and suppliers were paid and complied with their obligations.
The chain’s owners said they were pleased with the court’s decision.
The company had to pay more than $20 million to settle with the government and the plaintiffs’ lawyers said they will appeal the decision.