E-Discovery Firm Executive Alleges Bill Padding, Retaliation

A former Fronteo USA Inc. executive sued the e-discovery firm in San Francisco on Monday, alleging he was demoted and fired after discovering a scheme to over-charge customers and raising other issues related to inaccurate record-keeping.

Former Director of Revenue Management John Herndon said he discovered and then complained about what he alleged was a routine practice of padding client bills by adding in project management activities not provided for in the original contracts. The regular use of credit memos to reimburse angry clients for over-billing led the company to over report its revenue, Herndon said.

Herndon, who alleges he ...