A businessman once touted as a model employer for Atlanta’s job training agency has pleaded guilty to stealing federal grants from the program.
Kevin Edwards, an entrepreneur known for nightclubs like Krave and Aurum Lounge and a former contractor for the Atlanta Workforce Development Agency (AWDA), faces up to 10 years in prison and will be sentenced in federal court May 18. He is currently free on bond.
The city, on behalf of AWDA, has also agreed to pay $1.86 million in a civil settlement claiming it provided shoddy oversight for federal Department of Labor funds that were supposed to be used for job training, according to the U.S. District Attorney's Office for the Northern District of Georgia.
An Atlanta Journal-Constitution investigation in 2014 raised pointed questions about the workforce agency's jobs programs dating back to 2010. Following the Great Recession, the agency used hundreds of thousands of dollars in federal emergency funds for job education and paid companies for bogus workers or non-existent training, the investigation found.
Much of the on-the-job training money ended up in the pockets of businesses with ties to city insiders. The agency’s mission is to provide help with interviews, job referrals and vocational training.
“The resolution of these related cases ends a troubled chapter for the AWDA,” U. S. Attorney John A. Horn said in a statement announcing Edward’s guilty plea. “AWDA exercised lax oversight over the (On-the Job Training) program, and this lack of controls set the stage for Edwards and his companies to abuse the program and steal funds that were intended to help citizens develop skills and find jobs.”
Prosecutors determined that Edwards owned or controlled three companies that received $649,000 in federal funds through the city’s workforce development agency. But the government’s investigation found that Edwards didn’t provide promised job training, submitted phony reimbursements for employees that never did any work and paid some workers only a fraction of what he reported to AWDA.
The money was doled out in the form of federal grants. Though many companies could have qualified, the agency didn’t advertise these grants, the AJC’s investigation found. Businesses learned about the grants through city officials or other insiders.
Claiming to be vice president of a home-building company, Edwards signed contracts with 50 agency clients to be trained and work as carpenters.
Instead, clients were told to cut grass, clean up grounds and work at one of his nightclubs.
Edwards also set up a daycare. One woman, who was listed as a daycare trainee, was also listed as a corporate officer at two now-closed nightclubs Edwards ran.
The civil settlement claimed that between 2010 and 2014, the agency falsely claimed it was in compliance with Department of Labor regulations related to the federal grants.
In its statement, prosecutors alleged the agency gave money to companies that, “enrolled existing employees instead of new job seekers, failed to provide any training to the OJT enrollees, and hired highly skilled employees, including individuals with professional licenses, who were not eligible for OJT.”
The settlement with the city did not include an admission of liability.
“This City of Atlanta settlement resolves the allegations that the AWDA failed to ensure that U.S. Department of Labor funds were used to benefit those who qualified for the Department’s On-the-Job Training Program,” said Rafiq Ahmad, Special Agent-in-Charge of the Atlanta Regional Office of the U.S. Department of Labor, Office of Inspector General. “We will continue to investigate allegations of DOL grant fraud, especially when Americans workers may be deprived of training and employment opportunities.”
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