Drakontas LLC, Federal Grant Abuse, Pennsylvania 2010

PHILADELPHIA – In a shocking case of federal grant abuse, Drakontas LLC, a for-profit technology company with offices in Glenside, Pennsylvania and Camden, New Jersey, has agreed to pay $155,322 to resolve allegations that it improperly spent federal grant funds that it received under cooperative agreements with the United States Office of Justice Programs.

According to a civil settlement agreement, Drakontas LLC’s accounting system lacked sufficient detail and did not comply fully with the requirements of the cooperative agreements, resulting in the company not accurately recording and supporting all drawdowns of grant funds during the year 2010.

The company was also reimbursed for certain compensation of high-level executives that exceeded the amounts permitted under the cooperative agreements during years 2009 and 2010.

Drakontas LLC’s payment of the settlement amount resolves those accounting problems during year 2010 and the company’s payment of excess compensation during years 2009 and 2010.

In addition to the payment of $155,322, Drakontas LLC agreed to undertake a broad compliance program to ensure proper use and accounting of federal grant funds in the future.

The investigation and resulting settlement underscore the need for federal grant recipients to follow the rules for using and tracking grant funds – and, in particular, any rules that limit employee compensation – because grant recipients will be held accountable for mishandling funds.

As part of this settlement, Drakontas LLC did not admit to liability or wrongdoing.

The allegations arose from an investigation led by the United States Office of Inspector General. The case was handled by Assistant United States Attorney Michael S. Macko.

Mandatory facts: Defendant/Respondent – Drakontas LLC, Exact criminal charges – Federal Grant Abuse, City and state – Philadelphia, Pennsylvania, Exact date – N/A, Sentence or outcome – Drakontas LLC agreed to pay $155,322 and undertake a compliance program, Dollar amounts – $155,322.

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