Former Employee Sues Identiv, Alleges Fraud and Improper Spending on a Government Employee - NBC Bay Area
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Former Employee Sues Identiv, Alleges Fraud and Improper Spending on a Government Employee

A former employee has filed a lawsuit against Fremont based Identiv, claiming her boss Jason Hart, then CEO and current president, instructed her to use company money to pay for his personal expenses.

A former employee has filed a lawsuit against Fremont based Identiv, claiming her boss Jason Hart, then CEO and current president, instructed her to use company money to pay for his personal expenses. Vicky Nguyen reports in a video that first aired on Jan. 7, 2016. (Published Thursday, Jan. 7, 2016)

In her job as an executive assistant at Identiv, Ana Ruggiero says her job routinely included processing all kinds of expenses for then CEO and current president Jason Hart. But she says when she started noticing he was submitting personal expenses to Identiv for reimbursement, she began to raise red flags.

Now she’s filed a lawsuit with the Alameda County Superior Court against her former boss and Identiv, claiming she was fired in "retaliation for her complaints about Hart’s unlawful and fraudulent conduct" in addition to age discrimination.

"It was unethical what he was doing," Ruggiero said in an exclusive interview with NBC Bay Area. She contends Hart spent company money on gifts for a government official, personal expenses, and wild parties.

Her lawsuit claims Hart’s personal expenses included 5-6 servers purchased on eBay for $18,000 each. Servers, she says, that "were at his home" and never "part of Identiv’s information technology system." She also points to $3,000 in American Express gift cards that were designated for "rewarding employees." She claims the gift cards actually went to Hart’s groundskeeper because he "owed him money."

Ruggiero said, "The company didn’t benefit from it. It was his lifestyle that was being funded."

She also alleges an improper relationship between Hart and a government official. In the lawsuit, Ruggiero details how Hart used Identiv money to pay for gifts and travel for "a contact in the United States government believed to have been ... influential in assisting Identiv obtain certain government contracts worth millions of dollars."

Ruggiero said John Bailey, then an employee with the U.S. Marshals Service, under the Department of Justice, was a regular at Identiv events, dinners and parties in Las Vegas.

"Jason mentioned to me that Mr. Bailey was an influential person in purchasing, specifically the products that we sold," Ruggiero said, detailing a Fourth of July pool party in 2014 at Wet Republic in the MGM Grand Las Vegas. Ruggiero provided documents she says Hart gave her to use for reimbursement from Identiv. The bar bill was $8,700, including four magnum-sized bottles of vodka and champagne, plus 10 more bottles of bubbly for a poolside "champagne shower." The records Ruggiero provided appear to include Bailey's airfare and itinerary.

"It's a conflict of interest," Ruggiero said, "You cannot intermingle with a government official."

Bailey said via phone he had no comment about the allegations.

In a statement from the U.S. Marshals Service, spokesman Drew J. Wade said, "John Bailey was employed by the U.S. Marshals Service from September 2011 to April 2015. The Marshals Service takes seriously any allegations of misconduct by its employees and, when made aware, takes appropriate steps to address the actions. We are seeking Department of Justice Office of Inspector General review of the matter."

According to the federal website that tracks government contracts, Identiv and its subsidiaries have been awarded $11,746,586.46 in federal contracts since May 2011, when Hart became Identiv's CEO. That includes deals with the Department of Justice and the General Services Administration--where Bailey now works.

"There is a specific statute that prohibits government employees from accepting gifts," said UC Hastings College of the Law professor John Crawford. His research focuses on financial markets and institutional regulation.

Crawford is referring to the law that prohibits federal employees from accepting gifts that exceed $50 a year from a single source. The law also requires all gifts to be reported, including entertainment and meals.

"If you're eating food and not picking up the bill, if you're drinking drinks and not picking up the bill, if you are at an entertainment event, a sports event, and not paying for the tickets, those are all types of in-kind gifts," Crawford said. "If the allegations are true, this is pretty extravagant entertainment and the idea is it affects the judgment of the people who are deciding who's going to provide services to the government and taxpayers."

Using the Freedom of Information Act, the NBC Bay Area Investigative Unit requested all of Bailey's disclosures to the U.S. Marshals Office and the GSA. Both agencies said they had no records of any gifts.

Jason Hart did not respond to requests for comment.

Neither did Gary Kremen, the founder of match.com and chairman of the Board of Directors for the Santa Clara Valley Water District who also serves on the board of directors for Identiv. Ruggiero said, not only did Kremen party with Hart and Bailey in Las Vegas during the Fourth of July 2014, he didn't hold back.

"In fact, Gary Kremen is the one who had the massages," Ruggiero said. Her lawsuit claims Kremen had $1,900 in massages and said she was instructed to submit the bill to Identiv for payment.

When asked how he would characterize the relationship between Identiv leaders and the government employee detailed in Ruggiero's lawsuit, law professor Crawford said, "Corrupt. Assuming the allegations are true, I think this sort of wining and dining is clearly meant to win business. It's probably completely appropriate in the context of private companies dealing with each other but once you involve a government official and taxpayer dollars, it becomes inappropriate."

Identiv did not file a response to Ruggiero's complaint but a motion to move the case to arbitration was granted.

If you have a tip for Vicky Nguyen about this or any other story, you can email her directly at vicky@nbcbayarea.com or you can email theunit@nbcbayarea.com or call 888-996-TIPS.

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