Iron Mountain Corporation and Shred-It USA, two of the largest document shredding companies in the nation, have agreed to pay $1.1 million to settle allegations that they knowingly failed to meet the requirements of their federal contracts. According to the allegations, Iron Mountain Corporation, Shred-It USA, and non-settling co-defendant Cintas Corporation insufficiently shredded sensitive government documents. Under the contract, documents had to be shredded into pieces no larger than 1/32nd of an inch by 1/2 an inch, but in some instances the companies were allegedly using equipment that created pieces 100 times that size.

The qui tam lawsuit was initiated by the owner of a small shredding business that attempted to compete with the three large companies, but was rejected from federal contracts because its equipment was unable to perform to government requirements–the same requirements the three companies failed to meet. Knowing, based on his experience in the industry, that Iron Mountain Corporation, Shred-It USA, and Cintas Corporation’s trucks were also incapable of meeting government requirements, the owner filed a whistleblower False Claims Act case against those companies. The owner of the small business will receive a portion of the amount recovered by the government as a reward for bringing the fraud to the government’s attention.

Read the entire article, “Iron Mountain and Shred-It Pay $1.1 Million to Resolve False Claims Act Charge”