NIB Agency Gets Heavy Fine For Fraud

by Kevin Burton

   A non-profit agency established to provide employment for the blind paid a fine of more than $1.9 million amidst claims it defrauded the federal government, according to published reports.

   Industries for the Blind and Visually Impaired, located in Milwaukee, bought millions of dollars worth of products from Asia and sold them, passing them off as products made by blind American workers, the Milwaukee Journal Sentinel reported Sept. 29.

   This was in violation of the federal Javits-Wagner-O’Day Act (JWOD), under which agencies within National Industries for the Blind get set-aside contracts from the federal government through the Ability One program.

   The violations came to light because of the actions of a whistleblower.

   Paul Inzeo, a former marketing manager for the company, began documenting the illegal practices. He filed a False Claims Act action against IBVI in 2015 claiming it became “a multi-million dollar enterprise designed to enrich its officers at the expense of the very people it was created to help,” according to the lawsuit, The Journal-Sentinel reported.

   The False Claim Act allows workers with inside information of fraud against the federal government to file a claim under seal while the Justice Department investigates. 

   “Exploiting the blind to perpetrate a scheme to defraud the government is among the most outrageous conduct I have seen in a decade of whistleblower cases,” said Brian Mahany, Inzeo’s attorney.

   Inzeo told the Journal-Sentinel that he has a son with Autism and that it bothered him to see how people with a disability were being used. 

    “The sales brochures pictured blind employees, but I witnessed sighted part-time workers handling the repackaging, relabeling and assembly,” Inzeo told the Journal-Sentinel. “When I asked the warehouse manager why he replied it was easier to hire sighted workers because it took too long to teach the blind how to do the work.” 

   “I walked into the job thinking, ‘I’m going to do wonderful things for people that really need it,’” Inzeo said. “But it was all exploitation.” 

   The Imperial Valley News reported that the settlement resolves claims that furniture designers and sales representatives working for IBVI took impermissible gifts and payments from manufacturers on certain contracts, and that IBVI improperly subcontracted a set-aside contract for screen-printed clothing to an entity that did not generally use blind labor.

   IBVI President and CEO C.J. Lange said in a statement that his company worked with the Justice Department and found that none of the initial claims brought by Inzeo were valid but that it found two employees who were “engage in inappropriate activities” and were fired.

   “These settlement negotiations have provided an opportunity for us to strengthen our relationship and trust with the United States government, while also ensuring that our staff is working toward our mission of blind employment,” the statement reads.

   “At Industries for the Blind and Visually Impaired (IBVI), our employees inspire us with their commitment to excellence. They make us who we are. And they make it possible for us to do what we do: provide the best, most cost-effective industrial supplies—made with a true purpose,” reads the front page of the IBVI website.

   The Justice Department investigation found that IBVI did not live up to that standard.

   “By its conduct, IBVI thwarted the Ability One program’s goal of increasing employment and training opportunities for persons who are blind or visually-impaired,” said Matthew D. Krueger, US Attorney for the eastern district of Wisconsin, quoted in the Business Journal.

   The JWOD law stipulates that IBVI and other agencies under National Industries for the Blind ensure that at least 75 percent of the workforce is made up of people who are legally blind.  This is the basis upon which agencies get the set-aside contracts. Inzeo’s suit suggested the IBVI ratio is far lower than that. 

   Inzeo said that while he worked at IBVI (from 2007 to 2013) the company imported from China, Taiwan and South Korea more than $40 million worth of products annually, then misrepresented them as goods made by American blind workers.

    Inzeo named five officers of IBVI in his suit, but the government intervened against only the company, not the individuals.