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Whistleblower Lawsuit Alleges Fraud Against Wal-Mart

metal WhistleBarbara Laubenstein, a former executive of Conair Corp., has “blown the whistle.” She recently revealed that she was fired for reporting an alleged fraud against Wal-Mart, its largest customer.

Ms. Laubenstein started working for Conair’s Allegro Division in 2009. This division sold approximately $30 million worth of products to Wal-Mart in 2012. Additionally, Conair acted as Wal-Mart’s advisor, offering marketing and consumer business plans to the mega-retailer.

Even though Wal-Mart’s business was critical to Conair, Laubenstein alleges that Conair would dump its old products to Wal-Mart’s stores. She claims that Conair alter the UPC labels of the out-dated products with a current product’s UPC label. This allowed Conair to get rid of its old inventory while still charging the higher price of better products.

According to Laubenstein, she was fired in 2013 when she confronted her boss about the illegal activity. Laubenstein’s whistleblower lawsuit claims she was wrongfully terminated and seeks to recover her old job or an award for lost pay. She is also seeking an award of damages.

Whistleblower lawsuits are becoming more commonplace. Since the 2010 Dodd-Frank Act was passed providing that a monetary award can be granted to individuals who provide the Securities Exchange Commission with reliable and top-quality information that leads to an enforcement action resulting in more than $1 million in sanctions. As a way to encourage whistle-blowing, the monetary award can be 10% to 30% of the money collected in the SEC’s action, which can be a big chunk of change!

If your business is faced with a situation involving a whistleblower, we can help. Call us at 916-333-0833 as soon as possible to obtain the advice and guidance your business needs.

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