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Record Management Company Settles False Claims Act Case

The Justice Department announced that Iron Mountain Incorporated and Iron Mountain Information Management LLC (collectively “Iron Mountain”) has agreed to settle allegations by two whistleblowers in a qui tam lawsuit that it overcharged the government in violation of the False Claims Act. According to the Justice Department, the allegations concern General Services Administration contracts under which Iron Mountain provided record management services to various government entities between 2001 and 2014. The Justice Department alleged that Iron Mountain breached the contracts by providing inaccurate information about its sales practices during contract negotiations and overcharged the government for services provided.

Iron Mountain is a publicly-traded company headquartered in Boston, Massachusetts. Whistleblower Brent Stanley is a Massachusetts resident. He was employed by Iron Mountain as an account executive from May 2001 to March 2009. The second whistleblower, Patrick McKillop, is an Arizona resident who has been employed in the document storage industry for over 30 years.

According to the whistleblowers’ complaint filed in the United States District Court for the Eastern District of California, in its application for the initial contract in 2001 and the extension of the contract in 2006, Iron Mountain gave false, incomplete, and inaccurate information about its commercial pricing practices to the government. As a result, the government claims it agreed to prices that were higher than it would have agreed to if Iron Mountain had provided truthful and accurate information. In addition, the whistleblowers alleged that Iron Moutain failed to inform the government of lower prices it was offering to non-government, commercial customers and failed to provide these discounts to government purchasers, as required by the contract.

The government also alleged that Iron Mountain charged the government for storage that Iron Mountain claimed met the National Archives and Records Administration requirements when, in fact, it did not meet the requirements.

According to the Justice Department, Iron Mountain will pay $44.5 million to settle the allegations that it violated the False Claims Act. As their reward under the qui tam provisions of the False Claims Act, the two whistleblowers will share in $8,010,000 of the settlement proceeds.

To learn more about whistleblower and False Claims Act cases, click here to watch our video What is Procurement Fraud?

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