Product News and Recalls

Qui Tam Complaint Results in $1.1 Million Settlement

According to a July 9th statement from the United States Attorney’s Eastern District of Pennsylvania Office, two of the biggest document-shredding companies in America have agreed to pay a total of $1.1 million dollars to resolve a lawsuit over their failure to properly shred sensitive government documents.

In a classic story of David vs. Goliath, the plaintiff, an owner of a family run document-shredding business, took on three of the biggest document shredding companies in America and now stands to receive a portion of the $1.1 million dollar settlement.

The plaintiff initiated a qui tam lawsuit under the False Claims Act in the Federal District Court in Philadelphia alleging that the three largest vendors of secure document-shredding services in the U.S. failed to shred sensitive government documents as required by their contracts with the United States General Services Admiration or (GSA).

The Federal False Claims Act allows private persons to file a lawsuit against businesses and individuals that have directly or indirectly defrauded the federal government.

The plaintiff alleged that Iron Mountain, Shred-It and Cintas were receiving millions of dollars in shredding business from the U.S. government despite the fact that the shredding trucks used by those companies were not designed to produce residue particles as specified in GSA’s bid.

None of the companies involved admitted guilt but instead opted to settle the matter to avoid the much higher cost of an extended legal battle.