The city of Chicago said the company it hired to install electric vehicle charging stations didn’t live up to its end of a $1 million contract.
In a complaint filed May 31 in Cook County Circuit Court, the city took aim at 350Green LLC as well as its president, Timothy Mason, and Chief Executive Officer Mariana Gerzanych. The city accused the company of fraud with respect to a $1.07 million contract to install and operate car charging infrastructure.
According to the complaint, 350Green was required to hire and pay subcontractors, then submit proof of payment to the city for reimbursement. The city alleged the company failed to pay subcontractors despite asserting the work was complete and paid for.
The project goes back to a 2009 U.S. Department of Energy grant under the Clean Cities Program. That grant required Chicago to select a subrecipient to complete the work, incurring costs including paying subcontractors, then submit documentation to the city for reimbursement. Following a competitive bid process, Chicago selected 350Green in October 2010, amending its agreement in February 2011.
Under the terms of the deal, 350Green was to install, own, operate and maintain 73 CharJit Express Plazas, including 73 DC fast-charging stations and 146 Level 2 chargers, as well as 61 Level 2 chargers dedicated for I-Go and Zipcar vehicles. The 2011 amendment covered additional funding from an Illinois Department of Commerce and Economic Opportunity grant as well as 350Green, which also requiring 350Green to “submit specific monthly requisitions for reimbursement.”
In its complaint, the city cites 350Green’s second invoice, submitted June 9, 2011, for $65,663, and its fifth, submitted Dec. 14, 2011, for $1.01 million. The latter submission included copies of the front of signed checks made out to the relevant subcontractors. By the time 350Green submitted its seventh invoice, a $46,800 request on Feb. 27, 2012, it said total project cost had reached $3.69 million
The city said in April 2012 it discovered subcontractors had stopped working after not being paid since January. On May 23, 2012, the city said it learned of a potential issue with the December 2011 invoice. According to the complaint, 350Green said it paid $1.89 million to Actium Power LLC, identified as the “exclusive North American Dealer for Efacec USA.”
However, Efacec CEO Antonio Ribeiro emailed the city, saying his company sells directly to buyers and was not aware of any dealer named Actium Power, nor was it paid for the chargers it shipped to 350Green. An online search revealed the owner of the actiumpower.com domain to be Gerzanych. Ribeiro said it billed 350Green no more than $26,000 per charger, but when 350Green listed its payments to Actium, it said each charger cost $49,890.
The city said the state and federal governments disallowed $616,000 of its costs as ineligible grant funding based on 350Green’s conduct. On May 2, Mason pleaded guilty to wire fraud in federal court in Chicago related to false invoices. On the same day, Gerzanych entered into a deferred prosecution agreement with the court, admitting participation in the scheme.
In its state law complaint, the city alleged violation of its false claims and false statements ordinances, said 350Green committed consumer fraud and deceptive business practices and breach of contract and accused Mason and Gerzanych of civil conspiracy. The city wants the court to assess statutory civil penalties, to order restitution and to force profit disgorgement.
The city is represented in the action by corporation counsel from its Department of Law.