Textile Corporation of America Under Investigation for Wire Fraud and Money Laundering
Textile Corporation of America (TCA), a manufacturer of linens and apparel who promised to bring 1,000 jobs to Pikeville, Tennessee, is under federal investigation.
PIKEVILLE, Tenn.-Textile Corporation of America (TCA), a manufacturer of linens and apparel who promised to bring 1,000 jobs to Pikeville, Tennessee, is under federal investigation.
Nearly two years following the promise of jobs, after federal and state leaders came together to support the owners of TCA, the company is the subject of a criminal investigation for allegedly defrauding taxpayers out of millions of dollars.
(Image courtesy Twitter @BlissZechman of WTVC NewsChannel 9? in Tennessee)
According to a local Tennesse news source, “A federal seizure warrant says that around June 2017, Karim Sadruddin and Rahim Sadruddin acted through one of their businesses, TCA, to receive a $3 million economic development grant from Tennessee’s Department of Economic and Community Development.”
The grant money was to go toward purchasing and renovating a textile manufacturing facility in Pikeville, Bledsoe County, Tennessee.
According to a federal seizure warrant, the Sadruddins provided fraudulent invoices and wire transfer records showing that work had been done to renovate the facility in order to receive payment through a state grant. The documents also say the Sadruddins received a $230,000 grant from the Tennessee Valley Authority, intended for the proposed renovations at the textile facility. The FBI alleges that the company’s owners did not spend that money accordingly and used the funds for personal use.
The same document states the FBI sought seizure of several bank accounts totaling more than $2.2 million related to the Sadruddins.
Federal agents also accuse the Sadruddins of attempting to defraud the federal government following a contract they agreed to with the Federal Emergency Management Agency (FEMA). The deal was worth $30.7 million.
The Sadruddins agreed to deliver 475,000 “self-help tarps” to victims affected by the 2017 hurricanes in Puerto Rico. The court documents claim the Sadruddins did not follow the contract and provided tarps that did not meet the requirements laid out. Before suspending the contract, FEMA paid the brothers $3.7 million.
Tennessee’s ECD department released a statement saying, “This is indeed an unfortunate situation on a multitude of levels. We are most disappointed for the residents and families of Pikeville and Bledsoe County.”
The Tennessee Bureau of Investigation (TBI) says they are actively investigating TCA.
In an article written by the Daily Beast, Pikeville Mayor Phil Cagle says, “What really upset me was offering people over there 1,000 jobs. These people really put a lot of hope into that. So, to see somebody come in and steal all their grant money, and them living like kings, that’s what bothers me the most. I wish I’d never met them.”
The Pikeville, Tennessee facility has not yet been in operation since TCA announced the move to the 186,000 square-foot, 16-acre facility in August of 2017.
No formal criminal charges have been filed.