Fabric company settles whistleblower’s allegations of defrauding prison industry program

by Ben Vernia | February 11th, 2023

On February 10, the U.S. Attorney’s Office for the Eastern District of Kentucky announced that Tabb Textiles, Co., Inc., had agreed to pay over a third of a million dollars to settle a whistleblower’s allegations that the company defrauded the federal UNICOR prison industry program. According to the office’s press release:

Tabb Textiles Co., Inc. (“Tabb”), and individuals affiliated with the company, have paid $344,516.80 to resolve allegations that Tabb improperly billed Federal Prison Industries, Inc. for fabric that was sourced overseas, in violation of contract requirements.

Federal Prison Industries, Inc., also known as “UNICOR,” is a corporation wholly owned by the United States that allows inmates of the Bureau of Prisons to obtain occupational skills and work experience prior to their release.  UNICOR’s operations include the manufacturing of apparel and other textile goods at twenty-three locations across the United States.  Through these operations, UNICOR also strives to support the domestic economy, acquiring its manufacturing supplies from American companies.

On April 1, 2016, UNICOR awarded Tabb a contract for the provision of domestic fabric for use in UNICOR’s textile operations.  Under the contract, Tabb supplied over six million yards of fabric to UNICOR.  Of these six million yards of fabric, approximately 200,000 yards of fabric came from a foreign source, an error that arose from Tabb intermingling foreign and domestic fabric after the bleaching process.

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The U.S. Attorney’s Office announced that the whistleblower will receive $65,000 from the settlement (an approximately 19% relator’s share).

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