SALEM
COMPANY SUED AFTER FAILING TO REFUND STATE $3.4 MILLION FOR 900,000 UNDELIVERED
N95 MASKS, FUNNELING TAXPAYER FUNDS TO OWNERS
Bedrock Group LLC Made Repeated False Claims That Payments Owed to State Were in Process While Owners Spent Funds for Personal Use
BOSTON – A Salem-based limited liability company and its owners have been sued for their failure to return $3.4 million to the state for N95 face masks not delivered during the pandemic, instead diverting hundreds of thousands of dollars to the owners and their families for personal use, including casino trips, cash withdrawals, furniture and meal delivery services, Attorney General Maura Healey announced today.
In a complaint filed Monday in Suffolk Superior Court, the AG’s
Office alleges that Bedrock Group, LLC and its owners – Bedrock Consulting
Group, Anthony Damore, Jonathan Roth, Enrique Sperling, and Howard Sperling –
made repeated false claims to the Commonwealth for more than two years
concerning their intentions and efforts to return funds to Massachusetts for
more than 900,000 masks they failed to deliver during the early days of the
COVID-19 pandemic in 2020.
“During the height of the pandemic, when the country
was facing a shortage of N95 masks, this company and its owners took millions
of dollars from Massachusetts for much-needed PPE only to enrich themselves,”
AG Healey said. “We are suing to hold Bedrock and its owners accountable for
their deceit and to get taxpayers their money back.”
The lawsuit further alleges that by failing to return the
money owed to the state and by continuing to make false claims about their
intention to do so, the company and its owners violated an assurance of discontinuance the company reached with the
AG’s Office in 2021 in which they agreed to pay the state approximately $3.4
million by January 2022 to cover the funds owned plus $250,000 in penalties. To
date, Bedrock has made only one $100,000 payment and delivered 100,000 of the 1
million masks ordered by the state.
The AG’s complaint alleges that in the 13 months following
the state’s $3.6 million payment to Bedrock for the N95 masks in April 2020,
Bedrock used taxpayer dollars to complete more than $700,000 in direct
transfers to Roth, Damore, Howard Sperling, and Enrique Sperling, and members
of the Sperling family, while at the same time not paying the state and making
false claims about the status of payments. Additionally, the company racked up
more than $100,000 in debit and credit card charges that were unrelated to its
business functions including $52,000 in charges at casinos, more than $46,000
in Venmo cash transfers, $7,400 at a furniture store in California, and more
than $3,000 in UberEats food delivery services.
Through the lawsuit, the AG’s Office is seeking to recover
the full $3,355,422 owed to the state, treble damages, civil penalties and
attorneys’ fees.
This case is part of AG Healey’s ongoing
work to hold accountable those who have tried to profit illegally from the
COVID-19 pandemic. In January 2021, the AG’s False Claims Division reached a
$1,000,000 settlement with Colonial Auto Group for encouraging its workers to continue
working at the outset of the pandemic, despite being furloughed and collecting
unemployment benefits. And in November 2020, the AG’s False Claims Division
reached a $500,000 agreement with a Maryland-based company for
falsely marketing and selling to the Massachusetts Bay Transportation Authority
a product claiming to be an effective hand sanitizer alternative to prevent the
spread of COVID-19. The Division later sued another distributor of the fake hand sanitizer product
for falsely marketing and selling it to school districts across the state,
claiming it could kill the COVID-19 virus and provide a multi-hour barrier
against the virus without the need for reapplication.
This matter was handled by Assistant Attorney General Sean
Hildenbrandt of AG Healey’s False Claims Division, with assistance from False
Claims Division Chief Amy Crafts, False Claims Division Paralegal Cara Bradley,
and Colleen Frost of the AG’s Civil Investigations Division.
The False Claims Division was created by AG Healey in 2015
to safeguard public funds and promote integrity and accountability in public
contracting. AG Healey urges anyone with information about suspected fraud or
abuse relating to state or municipal contracts or funds to contact the False
Claims Division’s tip line at 617-963-2600.
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