WHEELING – A lawsuit has been filed in federal court by U.S. officials alleging that 15 people and 12 companies participated in a kickback scheme while working on two federally-funded laboratory projects in West Virginia.
Raymond Hobbs; Isaac Berzin; Ivett Cuen; Elliott “Ryan” Hobbs; Ian Hobbs; Alana McCamman; Scott McCamman; David Haberman; Nanci Haberman; Donald Karner; Xiaolei Sun; Ernesto Tom; Brian Waibel; Joy Waibel; Christopher Wright; Algem LLC; ClarityGroup Inc.; Dynasep LLC; Electric Transportation Engineering Corporation; Element Cleantech Inc.; Energ Flux LLC; Greenfuel Technologies Corporation; IF LLC; Impact E3 Foundation Inc.; Omni Engineering PLLC; Radiant Services LLC; Sun Tech Inc. were all named as defendants in the suit.
The lawsuit was filed Dec. 15 in the U.S. District Court for the Northern District of West Virginia by the United States of America.
The plaintiff claims that Raymond Hobbs, who was employed by Arizona Public Service Company, was the principal investigator for two NETL projects and was primarily, if not exclusively, responsible for issuing purchase orders, entering into subcontracts and authorizing payment of invoices generated by vendors and subcontractors.
In March 2010, APS discovered improprieties related to the projects, including insufficient supporting documentation and undisclosed conflicts of interest related to Raymond Hobbs’ administration of the projects, according to the suit. APS commissioned an independent audit of the projects.
The plaintiff claims APS determined that Raymond Hobbs was responsible for and complicit in the improprieties found in the administration of the projects and his employment was terminated.
Raymond Hobbs based his decisions to award subcontracts and purchase orders on his receipt of kickbacks from subcontractors or purchase order vendors and based his decisions to approve invoices submitted by subcontractors or purchase order vendors on his receipt of kickbacks from the subcontractors or purchase order vendors, according to the suit.
The plaintiff claims that kickbacks included cash payments, payments through checks or wire transfers to Raymond Hobbs and employment for his immediate family members and/or immediate family members of his associates.
The defendants concealed the kickbacks provided to Raymond Hobbs and knowingly made false statements, submitted false claims and engaged in a fraudulent course of conduct to fraudulently obtain funds from the United States, according to the suit.
The plaintiff claims the defendants’ false statements, claims and fraudulent court of conduct were material in that they caused the United States to enter into subcontracts and purchase orders that it would not otherwise have entered into and caused the plaintiff to pay claims for reimbursement that it would not otherwise have paid.
The laboratory projects, administered from Morgantown, involved more than $85 million of federal spending for developing natural gas co-production and carbon dioxide uses.
The plaintiff is seeking judgment against Raymond Hobbs for a civil penalty that is double the amount of kickbacks he accepted; civil penalties from the defendants that is double the amount of kickbacks provided; and $10,000 from each defendant for each violation of U.S. code with pre- and post-judgment interest. The United States is being represented by U.S. Attorney William J. Ihlenfeld II and Assistant U.S. Attorneys Alan G. McGonigal and Erin Carter Tison.
U.S. District Court for the Northern District of West Virginia case number: 1:16-cv-00236