LEXINGTON, Ky. – Tabb Textiles Co., Inc. (“Tabb”) just coughed up $344,516.80 to settle accusations of ripping off the federal government. The company, along with affiliated individuals, was busted for billing Federal Prison Industries, Inc. – better known as UNICOR – for fabric that wasn’t American-made, a direct violation of their contract.
UNICOR, a wholly-owned U.S. corporation, runs textile operations in twenty-three prisons nationwide, giving inmates job skills before they hit the streets. They’re supposed to boost the domestic economy by sourcing materials from American companies. Tabb, awarded a contract on April 1, 2016, to supply domestic fabric, allegedly betrayed that trust. Over six million yards of fabric were delivered, but a dirty little secret lurked within that pile.
Approximately 200,000 yards of that fabric? Imported. The screw-up, according to investigators, stemmed from Tabb’s sloppy handling of materials, intermingling foreign and domestic fabric *after* the bleaching process. It wasn’t a deliberate scheme, they claim, but negligence with a hefty price tag. A private citizen, acting as a whistleblower, filed a qui tam complaint – a lawsuit brought on behalf of the U.S. government – that kicked off the investigation.
The feds dug in, and Tabb’s own internal investigation confirmed the contamination. While they did purchase domestic fabric for the bulk of the contract, the mix-up meant UNICOR was stuck with foreign-sourced goods. Tabb cooperated with the investigation, spilling the beans on their own mistake and agreeing to make things right. The whistleblower isn’t going home empty-handed either; they’ll receive roughly $65,000 from the settlement.
The U.S. Department of Justice, Office of Inspector General, led the investigation, with Assistant United States Attorney Mary Melton handling the case for the government. The legal battle is officially documented as United States ex rel. Perlstein v. Tabb Textiles Co., Inc., et al., Case No. 21-cv-70-REW. It’s crucial to remember this settlement resolves *allegations* only – no formal determination of guilt has been made.
This isn’t just about fabric; it’s about accountability. Taxpayer dollars are meant to support American jobs and rehabilitate inmates, not line the pockets of companies cutting corners. Tabb Textiles learned a costly lesson: when you deal with the feds, transparency and compliance aren’t optional – they’re the law.
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Related Federal Cases
Key Facts
- State: Kentucky
- Agency: DOJ USAO
- Category: White Collar Crime
- Source: Official Source ↗
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