Memphis Goodwill Industries fined $150,000 in federal fraud case

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MEMPHIS, Tenn. — Memphis Goodwill Industries, Inc. will pay $150,000 to the federal government to settle allegations that the company lied about how many hours disabled employees were working.

According to the U.S. Attorney's Office in Memphis, Goodwill Industries was required by federal regulation to employ disabled people for 75% of its direct labor hours to qualify for contracts administered by the federal government's AbilityOne Program.

Goodwill submitted annual certifications saying the company was in compliance, but the Department of Justice alleged the actual hours worked by disabled employees was much lower than what the company reported.

The program involved contracts with the Internal Revenue Service, the Department of Veterans Affairs and the General Services Administration.

Michael Dunavant, United States Attorney for the Western District of Tennessee, said the false claims defrauded federal agencies, and hurt their ability to employ disabled people in the community.

"We are pleased to recover these funds for the fraud perpetrated against the United States, and hope that this settlement amount will send a significant deterrent message to other dishonest contractors,” he said in a statement.

Memphis Goodwill did not agree to an interview, but sent a statement saying that the settlement has to do with records from its fiscal year 2014. The company said it agrees to pay a monetary settlement, but does not admit liability.

It went on to say the company "has been in compliance with all federal regulations and requirements since fiscal year 2015 in its government contracts program and is not the subject of any further investigations."

Memphis Goodwill says its working relationships with all contracted government agencies have continued without interruption.


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