PDA

View Full Version : Puerto Rico Disaster Contractor Pocketed Millions in Taxpayer Cash




Swordsmyth
06-04-2019, 06:29 PM
The owners of the Textile Corporation of America promised the government that they could deliver 1,000 new jobs to residents of Pikeville, Tennessee, and millions of dollars of supplies to hurricane-ravaged Puerto Rico. And federal and state leaders lined up to support them, helping them secure millions of dollars in contracts and grants.
But two years later, the company is the subject of a federal criminal investigation alleging that its executives bilked taxpayers out of those millions.
According to affidavits filed by the Federal Bureau of Investigation in a federal court in Tennessee in October (https://www.documentcloud.org/documents/6112203-Sadruddin-email-warrant-affidavit.html) and February (https://www.documentcloud.org/documents/6112202-Sadruddin-seizure-affidavit.html), the Textile Corporation of America (TCA) fabricated evidence of work performed at a Pikeville, Tennessee, textile plant in order to draw grants from the Tennessee Valley Authority (TVA)—a federally owned corporation—and the state’s Department of Economic and Community Development.
The FBI alleges that the company’s owners pocketed much of that money for personal use.
But more than a million dollars of the grant money, investigators say, went towards the purchase of tarps to fulfill a $30 million Federal Emergency Management Agency hurricane relief contract. The TCA sister company to which FEMA awarded that contract, Master Group USA (MGUSA), used more fraudulent paperwork, including fabricated copies of invoices and wire transfers, to conceal the fact that it was purchasing those tarps from China, in violation of federal sourcing laws, the FBI alleges. FEMA awarded MGUSA nearly $4 million before canceling the contract, after the tarps failed to meet quality requirements.
Some information about the scheme (https://www.timesfreepress.com/news/business/aroundregion/story/2019/jan/16/pikeville-tennessee-textile-mill-mired-delays-lawsuits/486820/) has trickled into public view over the past year. But the existence of a federal criminal investigation into TCA and MGUSA, and the full extent of their alleged fraud, as spelled out in a pair of FBI affidavits, has not been previously reported. Those affidavits, filed in November and February, sought the seizure of millions of dollars from the companies’ Pakistani-American owners, brothers Karim and Rahim Sadruddin, and search warrants for their email accounts and those of a number of family members allegedly involved in the scheme.

More at: https://www.thedailybeast.com/feds-puerto-rico-disaster-contractor-pocketed-millions-in-taxpayer-cash