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Press Release

Malvern Company Charged With Defrauding The City Of Philadelphia

For Immediate Release
U.S. Attorney's Office, Eastern District of Pennsylvania

An information was filed today charging Airmatic, Inc., a company located at 284 Three Tun Road, Malvern, PA, with one count of mail fraud for allegedly defrauding the City of Philadelphia of approximately $556,633.03. Airmatic allegedly supplied unapproved, off-contract products to various City departments in violation of its agreements with the City.  The case was announced by United States Attorney Zane David Memeger and City of Philadelphia Inspector General Amy Kurland.

According to the information, Airmatic submitted false and fraudulent invoices to the City’s accounts payable department in order to conceal that it was providing off-contract products. Instead of reflecting the unapproved, off-contract products that were actually being provided, the invoices billed for items that were approved pursuant to the City’s agreements with defendant Airmatic.  It is further alleged that Airmatic inflated the cost of the unapproved, off-contract items and products it provided to the City by an average of approximately 87% and profited from this scheme in the amount of approximately $556,633.03.  For example, in one instance Airmatic falsely invoiced the City for a bearing assembly, an expensive industrial product and approved contract item, when, in fact, Airmatic delivered 12 asphalt rakes, items for which the defendant had no contract.  To disguise the transaction, Airmatic manipulated the invoice and billed the City for the price of the bearing assembly, which the City never received, resulting in an extravagant profit margin on the sale of the rakes.  Between January 2007 and August 2012, hundreds of similar transactions took place.   

If convicted the defendant faces a maximum possible sentence of five years of probation, a $500,000 fine or twice the pecuniary gain/loss, a $400 special assessment, and restitution to the City of Philadelphia.

The case was investigated by the City of Philadelphia Office of Inspector General and the FBI. It is being prosecuted by Assistant United States Attorney Jennifer Chun Barry.

Click here to view the indictment

An Indictment, Information or Criminal Complaint is an accusation.  A defendant is presumed innocent unless and until proven guilty.

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PATTY HARTMAN, Media Contact, 215-861-8525

Updated December 15, 2014