PHILADELPHIA – A nonprofit alternative transportation company working toward tube travel has taken legal action to recover more than $300,000 it says its former treasurer embezzled from it.
Tube Transport for America, Inc. of Washington, D.C., filed suit in the U.S. District Court for the Eastern District of Pennsylvania on May 20 versus Chad Wilkinson of West Chester.
“Plaintiff’s charitable purpose is to promote economic prosperity and social welfare by supporting alternative modes of transportation such as the hyperloop system, a sealed system of tubes through which a pod may travel free of air resistance or friction conveying passengers or objects at ultra-high speed while being very efficient and thereby drastically reducing travel times,” the suit says.
The plaintiff would “lobby and raise funds in the D.C. area to advocate for hyperloop technology research, development, and implementation nationwide.”
Wilkinson was appointed director and Treasurer of Tube on Feb. 28, 2019, serving in that role until his resignation 11 months later, on Jan. 27. As a director, Wilkinson was responsible for “upholding his fiduciary duties and acting in the best interest of Tube to ensure adequate management of the corporation’s affairs.”
“As Treasurer, Wilkinson was responsible for and in custody of all Tube’s funds and was to perform all duties incident to the office. Defendant was to ensure that an accounting system was in place and maintained in order to provide true and accurate accountings of the corporation’s financial transactions during periodical reporting to the board of directors,” the suit says.
Wilkinson was the sole custodian of Tube’s checkbook and debit card, the suit says.
Among other transgressions, Wilkinson was alleged to have redirected the address for the company’s bank statements to his own personal address in West Chester. On Jan. 27, Wilkinson was forced to resign as Tube’s Treasurer and Andrew Handel was immediately appointed to fill the vacancy.
In February 2020, Handel, acting as Tube’s new Treasurer, gained access to Tube’s bank statements covering the period of July 1, 2019 through Feb. 28. Upon review of the statements, Handel discovered that Wilkinson had misappropriated over $300,000 of Tube’s funds for his own personal benefit, the suit says.
Between July 1, 2019 and Jan. 27, the suit states Wilkinson conducted an excessive number of expenditures and withdrawals, only two of which were approved by Tube’s board of directors pursuant to its by-laws and none of the others had any substantiation or expense reports.
“No Tube representative has seen or spoken to Wilkinson since Feb. 28, when Handel texted Wilkinson regarding a $250,000 check made out to Tube that Wilkinson had in his possession. After careful review, Tube has determined that, since June 2019, Wilkinson stole in excess of $310,000 through the scheme described above,” the suit states.
For counts of breach of fiduciary duty, conversion, fraud and embezzlement or misappropriation of funds, the plaintiff is seeking actual damages in the amount of $310,000 plus interest thereon, costs expended herein, punitive damages and for such other relief as this Court deems appropriate.
The plaintiff is represented by Michael J. Engle of Buchanan Ingersoll Rooney in Philadelphia and Brian E. McGovern of McCarthy Leonard & Kaemmerer, in Town & Country, Mo.
The defendants has not yet secured legal counsel.
U.S. District Court for the Eastern District of Pennsylvania case 2:20-cv-02379
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com