Mayor Michael Bloomberg of New York was slapped with a multimillion-dollar lawsuit by federal prosecutors this week. The suit was filed against Mayor Bloomberg’s nonprofit agency, Seedco.
Seedco, according to their website, is a national nonprofit organization that advances economic opportunity for people, businesses and communities in need. The company advertises that they “provide a continuum of job placement, retention and advancement services to people who are looking for work and who are already employed in New York, NY and Memphis, Tennessee.”
The lawsuit was filed in federal court in Manhattan, naming seven former managers in the scheme. They are alleged to have manufactured “non-existent job-placements to protect their federal contracts and inflate their compensation,” says Preet Bharara, Manhattan US Attorney.
It has been alleged that 1,400 of the reported 6,500 job placements were fraudulent. As it turns out those who had supposedly been placed in jobs were actually still jobless or had found jobs on their own without the help of Seedco.
The report from the New York City’s Department of Investigation (DOI) says that Seedco “developed systematic practices to report false placements.” It has also been found that Seedco had gotten approval from the city to shred job placement documents for jobs between 2008 to February 2011. That means it is possible that the fraud numbers are actually higher than reported.
Although Seedco’s new leadership is making promises to make changed, the charges are not good news for the company. That however, seems to come rather late in the game. According the the lawsuit, Seedco is given tens of millions of dollars by federal, state and local funding each year based on its success in the world of job placement.
Seedco’s President and CEO says that the firm is cooperating with federal prosecutors. “The complaint concerns individuals that Seedco no longer employs. Also, to be clear, Seedco could not make a profit and indeed, never earned a profit on the contracts in question,” says Barbara Dwyer Gunn, CEO.