SEEDCO, Nonprofit Bloomberg Admin Fave, Slapped By Feds With Fraud Lawsuit

Federal prosecutors filed a civil fraud case this week against SEEDCO, which ran two job placement centers under contract with the city, for taking million of dollars in government funding without providing much service.

The SEEDCO lawsuit filed in federal court in Manhattan names seven former managers with the non-profit in the scheme, and makes clear that the fraud was part of the fabric of an organization that had been favored by the Bloomberg organization.

"SEEDCO was supposed to provide valuable job placement assistance that was underwritten by the federal government to New Yorkers in need," Manhattan U.S. Attorney Preet Bharara said. "Instead, as alleged, the defendants went to great lengths to manufacture non-existent job-placements to protect their federal contracts and inflate their compensation."

The lawsuit vindicates a whistleblower who reported the fraud to SEEDCO, and was rewarded with an attempted cover-up, Bharara added. That whistleblower has filed a federal lawsuit.

SEEDCO first won a contract with the city's Department of Small Business Services in 2004 to establish a job placement center in Upper Manhattan. In 2011, SEEDCO won a contract to do the same in the Bronx. Both centers were in operation through last month.

To get federal funding, the group had to file reports on its performance, and that's where the fraud came in. The organization's managers routinely falsified that data about how they were doing in placing people in jobs.

The managers did things like claiming to have placed people who were actually still unemployed, convincing businesses to falsely place people, using job websites to pull resumes and claim those people were placed in jobs, and had friends, family members and others fill out intake forms, again, to falsely report job placements to the feds. The seven named defendants all got promoted while engaged in the alleged fraud.

When the whistleblower reported the fraud to higher-ups in early 2011, the organization ordered an internal audit that "operated only to conceal the fraudulent conduct."

The seven named managers are Alex Saavedra, Shomari Greene, Alan Kat, Tagewatee Chandarpaul, Shandell Santiago-Velez, Mitchell McClinton and Monique Tarry.

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