Certified Collectibles Group (CCG) filed a lawsuit on Wednesday, August 8, charging international technology firm Globant S.A., along with its subsidiary Globant LLC, with a fraudulent scheme to cover up incompetent work on a failed software implementation project.
CCG comprises seven affiliated companies that provide expert and impartial services for collectors of coins, paper money, comic books, stamps, and other collectibles. The companies have certified nearly 55 million collectibles since 1987 and employ nearly 350 people globally, including more than 265 at their headquarters in Sarasota, Florida.
In 2016, CCG hired a consulting firm, which Globant acquired the following year, to implement a new enterprise resource planning (ERP) software system. The ERP system was intended to run the CCG companies’ core operations.
The lawsuit, filed in federal court in Tampa, states that after taking over the project, Globant agreed to complete it by a firm deadline and for a fixed price. CCG alleges that Globant gave repeated false assurances that the project was on track, even though the ERP system was defectively designed and nowhere close to completion. These assurances allowed Globant to fraudulently collect millions of dollars in additional fees from CCG.
According to the lawsuit, only after it obtained the last payment from CCG did Globant admit that it needed to perform basic design work, requiring that the project essentially start over. Ignoring its contractual obligation to complete the project for a fixed price by October 2019, Globant demanded another $5 million and told CCG the ERP system would not be ready for almost another two years. That demand came after Globant, and the firm it acquired, had already worked on the project for more than three years and collected nearly $5 million in fees. During that time, Globant had produced nothing of value.
In the lawsuit, CCG is seeking to recover tens of millions of dollars in damages caused by Globant’s misconduct.
“Globant agreed to complete our ERP project for a fixed fee by a firm deadline, but once the payments stopped Globant informed us that they would not complete the scope of work unless we paid an additional $5 million,” stated CCG’s Chief Executive Officer, Steven R. Eichenbaum. “After this … demand from one of Globant’s most senior executives, it later became clear that very little work was completed despite Globant’s repeated assurances that the project was on track.”
“We intend to pursue our claims aggressively to hold Globant accountable,” he added.
Certified Collectibles Group is represented by Mark P. Ressler, R. Tali Epstein and Maria Ruiz of Kasowitz Benson Torres LLP, a national law firm with one of the country’s leading software litigation practices.