Jury Finds Former Manager Of Federally Funded Job Placement Centers Liable In Civil Fraud Case
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ALEX SAAVEDRA (“SAAVEDRA”), the former director of two Structured Employment Economic Development Corporation (“SEEDCO”) Workforce1 Career Centers, was found liable for violating the False Claims Act (the “FCA”) in connection with a federally funded program to provide assistance to unemployed and underemployed New Yorkers. The jury awarded damages to the United States in the amount of $13,000, which pursuant to the FCA will be trebled to $39,000. In addition, the FCA provides for a civil penalty of $5,500 to $11,000 for each violation. The Court will determine the amount of SAAVEDRA’s civil penalty at a later date. The verdict was returned yesterday following a one-week trial before United States District Judge Alvin K. Hellerstein.
Manhattan U.S. Attorney Preet Bharara said: “Federally funded services such as SEEDCO’s career centers are meant to help people find jobs and achieve the American dream. Unfortunately, SAAVEDRA cared more about reporting big numbers than being honest. This fraudulent conduct resulted in the misappropriation of federal funds, and made it appear that more New Yorkers were getting help than actually were. Prior to the trial, the Government reached settlements with SEEDCO and six of its former managers for the same fraudulent conduct. Now a jury has found the last defendant, the highest ranking Workforce1 Center employee, liable as well. This Office will not hesitate to pursue companies and individuals who fraudulently exploit public funding. This verdict and this case underscore that individuals, as well as entities, responsible for fraud must be held accountable.”
According to the evidence presented at trial:
SEEDCO received federal funding to operate Workforce1 Career Centers (the “WF1 Centers”) in Upper Manhattan and the Bronx. These WF1 Centers provided, among other things, employment training and job placement assistance. In order to receive federal funding for its WF1 Centers, SEEDCO was required to report its job placement performance through a database maintained by the New York City Department of Small Business Services (“SBS”), called WorkSource1. The information was necessary for the calculation of performance-based payments under the federal program.
From 2009 to 2011, SAAVEDRA, as WF1 Center director, caused the entry of false placements into WorkSource1 to make it appear that job candidates had obtained jobs by or with the involvement of SEEDCO when, in fact, they had not. These false placements resulted in performance payments, with federal funds, that SEEDCO had not earned. SAAVEDRA was present at internal all-staff meetings during which this scheme was discussed and, on at least one occasion, instructed a SEEDCO employee to report false placements.
Mr. Bharara thanked the United States Department of Labor, Office of Labor Racketeering and Fraud Investigations, for its assistance in the case. He also thanked the United States Department of Labor Employment and Training Administration, the New York City Department of Investigation, and the New York City Department of Small Business Services.
This case is being handled by the Office’s Civil Frauds Unit. Assistant United States Attorneys Carina H. Schoenberger and Ellen Blain are in charge of the case.