Manager blows whistle on suspected fraud at Grainger

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in Leaders & Managers,Management Training

Brian Holbrook, a former district sales manager for W.W. Grainger Inc., an international maintenance supplier based in Lake Forest, has filed a whistle-blower lawsuit claiming the company repeatedly overcharged the U.S. government for its products.

Holbrook said Grainger signed a contract in 2005 to sell products at cost plus a fixed markup of 26%. Within months, Holbrook said, the company was charging more than the agreed-upon markup.

For example, Grainger sold an $18,000 laser-marking machine to the U.S. Air Force for $27,134—a markup of more than 50%. The company continued overcharging the government even after the fraud was exposed, Holbrook said.

Grainger spokesman Robb Kristopher said the Justice Department indicated it was willing to discuss the matter. “We believe we’re in compliance,” Kristopher said.

Holbrook said he complained repeatedly to management, resulting in credits to more than 40 government accounts, before he filed suit. The lawsuit seeks triple the amount of each overcharge, plus a civil penalty of between $5,000 and $10,000 per incident. Holbrook stands to get a cut of between 15% and 25% of the award under the federal False Claims Act.

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