Malvern company charged with defrauding the City of Philadelphia

By Jim Boyle | May 22, 2014

The U.S. Department of Justice has charged a Malvern, Pa.-based company with

one count of mail fraud for allegedly defrauding the city of Philadelphia of more than $500,000, according to a press release.

The statement says that Airmatic allegedly supplied unapproved, off-contract products to various city departments in violation of its agreements with the city. Airmatic submitted false and fraudulent invoices to the city’s accounts payable department in order to conceal that it was providing off-contract products, investigators say.

Instead of reflecting the unapproved, off-contract products that were actually being
provided, the invoices billed for items that were approved in accordance with the City’s agreements with 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 percent 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, the statement says.

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.

An indictment, information or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.


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