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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowUniversity Loft Co. has agreed to pay the federal government $400,000 following an investigation by the U.S. Justice Department alleging the Greenfield-based company violated trade agreements.
The Justice Department said Friday that a settlement with University Loft resolves allegations that the company knowingly sold Malaysian-made furniture to government agencies, which violates the Trade Agreements Act.
To strengthen government trade policy, the act sets requirements for the country of origin selling products to the United States. University Loft failed to comply with the rules under contracts it received from the General Services Administration that allowed it to sell to the military and other government entities, the Justice Department said.
“This settlement shows that companies that do business with the government will be held to the terms of their government contracts,” said Tony West, assistant attorney general for the Department of Justice’s Civil Division, in a prepared statement.
University Loft CEO James Jannetides did not return phone calls seeking comment this morning.
The settlement follows a federal investigation of alleged false claims and contract fraud against University Loft brought in a lawsuit by California competitor Furniture by Thurston Inc. Furniture by Thurston will receive a $66,000 share of the recovery.
Under the False Claims Act, private citizens can bring a lawsuit on behalf of the United States and share in any recovery obtained by the government.
The case was investigated as part of the National Procurement Fraud Initiative. The government formed the National Procurement Fraud Task Force in 2006 to promote the early detection and prosecution of procurement fraud associated with the increase in government contracting activity, particularly for national security programs.
Jannetides founded University Loft in 1986 while attending Southern Illinois University in Carbondale. Today, hundreds of institutions, from Yale University and the U.S. Naval Academy to Indiana University and Butler University, buy furniture from University Loft.
Many of the products are manufactured in Malaysia and shipped to Indianapolis or Morristown, Tenn., for assembly.
Founded in Indianapolis, University Loft purchased land in 2006 in Hancock County and built a new $22 million, 508,000-square-foot headquarters in Mount Comfort.
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