Whistleblowergov.org reported in 2015 that 1,000 public schools across California will receive the lion’s share of a $68.5 settlement of a California False Claims Act (FCA) case. Office Depot settled the case, without an admission of liability, based on allegations it “fraudulently overcharged California school districts for school supplies.” The two districts that will receive the most funds, according to the San Bernardino County Sun publication are San Bernardino and Los Angeles.

The whistleblower, David Sherwin, is entitled to nearly 1/3 share for his role in disclosing the fraud. Mr. Sherman was an account manager for Office Depot. In claims filed under the federal False Claims Act, a whistleblower is normally entitled to somewhere between 10 and 30% of any recovery. Recoveries can include treble damages and statutory penalties. The percentage awarded in this settlement, a California FCA claim (not a federal FCA claim) was above the normal high of 30%. The California FCA is modeled on the federal FCA.

The allegations against Office Depot included claims that the company “had guaranteed ‘lowest price’ treatment for its school customers by the terms of the United States Communities Government Purchasing Alliance (a co-op purchasing program for public schools) but offered larger discounts to some schools.

Mr. Sherman originally reported the misconduct back in 2009. His report prompted the state to investigate.

Office Depot, through its spokesman, said that the settlement was not an admission of guilt – rather it was an effort to end the ongoing litigation. They assert that the Mr. Sherwin’s claim was factually wrong but that they entered into the settlement to avoid “the costs and risks of protracted litigation and allows Office Depot to focus on its business priorities, including its integration with OfficeMax.”

The schools in California and other public entities will be able to use the funds for various purposes.

Sadly, Mr. Sherman died from cancer before he could enjoy the world. The $23 million award will be paid to his estate.

At the California Law Offices of Stephen Danz and Associates, we help public and private employees file qui tam, or whistleblower claims, with federal and state officials. We help the whistleblower document his/her claim and explain the legal requirements for filing a claim. If you are aware of any employer fraud or fraud by any person or company that involves payments by the government or governmental agencies, call us at 877-789-9707 or use our online contact form to make an appointment.