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Agency Sued for Allegedly Fraudulent Claims

May 23 2012

The government filed a civil fraud lawsuit against Structured Employment Economic Development Corp. (SEEDCO), a national not-for-profit corporation, for collecting millions of dollars in federal funds for job placement services that it allegedly did not provide as well as contracts allegedly obtained based on falsified performance reports, according to the U.S. Attorney’s Office for the Southern District of New York. Seven of SEEDCO’s former managers were also sued.

SEEDCO operated two New York City Workforce1 career centers aimed at assisting unemployed and underemployed New Yorkers find new job opportunities. The centers received federal funds.

The lawsuit seeks treble damages and civil penalties under the False Claims Act, according to the U.S. Attorney’s Office. The suit claims many of SEEDCO’s directors, deputy directors and managers routinely falsified, and directed others to falsify, entries into the WorkSource1 reporting database to make it appear that numerous job candidates had been placed in jobs through the corporation.

SEEDCO management also allegedly engaged in a cover-up of the fraud after it was reported by a whistleblower, a high-level Workforce1 center employee, in early 2011, according to the U.S. Attorney’s Office.

“SEEDCO was supposed to provide valuable job placement assistance that was underwritten by the federal government to New Yorkers in need,” said Manhattan U.S. Attorney Preet Bharara. “Instead, as alleged, the defendants went to great lengths to manufacture non-existent job-placements to protect their federal contracts and inflate their compensation. When the alleged fraud was reported to SEEDCO by a whistleblower, rather than taking steps to deter or prevent it, they allegedly engaged in a cover-up.  As today’s suit demonstrates, this type of fraud will not be tolerated.”

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