An attorney for Malvern-based Airmatic Inc. says the 70-year-old industrial equipment company has admitted to duping the City of Philadelphia out of more than $500,000.
Airmatic Inc. submitted false and fradulent invoices that listed products unapproved by the city at higher costs, according to mail fraud charge filed by U.S. Attorney for the Eastern District of Pennsylvania Zane David Memeger Monday.
"In one instance, Airmatic falsely invoiced the City for a bearing assembly, an expensive industrial product and approved contract item, when, in fact, Airmatic devliered 12 asphalt rakes, items for which the defendant had no contract," said Patty Hartman, U.S. Attorney's Office spokeswoman.
"To disguise the transaction, Airmatic manipulated the invoice and billed the City for the price of the bearing assembly, which the City never received," she explained.
Memeger alleges Airmatic committed hundreds of similar transactions between January 2007 and August 2012, totaling $556,633.03.
The company has been cooperating with authorities since the investigation begain in March 2013, said Joseph Poluka, a partner with Philadelphia-based law firm Blank Rome LLP, who is representing Airmatic.
"We have entered into a plea agreement with the government and as part of the agreement we will make full restitution to the city," Poluka said. "We have actually made one payment already to the clerk of court, which will go to the city once the case opens here."
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Airmatic inflated the cost of the unapproved items approximately 87 percent on average, according to the indictment.
Contact Alison Burdo at 610.668.5635, alison.burdo@nbcuni.com or follow @NewsBurd on Twitter.
