Posted: Feb 22, 2013 11:40 AM by NBC News (WOAI)
Updated: Feb 22, 2013 11:41 AM
NEW BRAUNFELS - The City of New Braunfels, Texas is demanding $1.3 million from The Scooter Store, claiming the company is in breach of contract.
Five days before federal and state authorities raided the corporate headquarters, the city sent The Scooter Store a letter, claiming the company broke its contract with the city.
The FBI says all agents left the headquarters this Thursday afternoon and employees were allowed to return to work. The company is the target of a Department of Justice investigation into possible Medicare fraud.
The City of New Braunfels claims in a letter that The Scooter store did not live up to a 2009 contract where the city agreed to pay the company for jobs created.
The Scooter Store created 401 jobs, but the city claims the company has, over time, cut at least 256 of those positions. Now the city wants the $1.3 million it paid for those jobs to be paid back. That money is sales-tax supported economic development dollars.
"We had a very precise contract with clawback provisions and we are following that to the 'T,' and we have, so there's been no delay or misinformation at all. We hope to get that money back," said Bob Gray of the New Braunfels Industrial Development Corporation.
The city claims it's critical The Scooter Store resolve its breach of contract within 30 days, but members of the Industrial Development Corporation Board say this week's raid could complicate things.
"For us, there's concerns for me personally for friends of my kids and their families and what it means to them. So we hope to sort of move beyond and that at the same time, protect from the 4B side, protect the monies we've invested," Gray said.
The Scooter Store was previously scheduled to make a presentation to the New Braunfels Industrial Development Corporation Board Thursday night but canceled following the raid.
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