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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Pennsylvania

FOR IMMEDIATE RELEASE
Tuesday, July 9, 2013

Settlement Announced In Whistleblower Suit Against Shredding Companies

PHILADELPHIA – A settlement agreement, resulting from a whistleblower lawsuit, was announced today between the United States and two of the country’s largest commercial shredding services companies.  Shred-It Incorporated and Iron Mountain, Incorporated were named in a whistleblower lawsuit that alleged that Shred-It and Iron Mountain contracted with the government to provide shredding services but did not cut the government’s documents to the size required under the General Services Administration’s standards.  Accordingly, their claims for payment for these services were false.  United States Attorney Zane David Memeger announced that Iron Mountain will pay $800,000 to the government, plus attorneys’ fees; Shred-It will pay $300,000 to the government, plus attorneys’ fees. 

The case was originally filed under the False Claims Act by Douglas Knisely, who operates a paper shredding business in Lock Haven, Pennsylvania.  The False Claims Act permits ordinary citizens (known as “relators”) to bring lawsuits in the name of the United States alleging fraud against the government.  The relator is entitled to a portion of the settlement.   

Shred-It and Iron Mountain are two of the largest companies in the United States that provide commercial shredding services to the government.

This matter was handled by Assistant United States Attorney Thomas Johnson and Gregory Pearson of the Department of Justice Civil Frauds Unit. 

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525