Kennewick company faces $1.3M in lawsuits
Once named the U.S. Department of Energy’s Protégé of the Year, a Kennewick business and its founder are now facing two lawsuits and a tax warrant totaling more than $1 million owed.
Kristopher Lapp, i-3 Global president, is being sued for breach of contract by Columbia State Bank, which alleges Lapp failed to pay back $883,000 borrowed through an original $700,000 line of credit that was increased to $1.2 million.
The lawsuit came days after another suit valued at $446,000 was filed on behalf of Integrated Global Staffing, a company governed by former i-3 Global intern and employee, President Jessica Holloway.
The lawsuits add to a growing list of debts already established, with a $44,000 tax warrant filed by the Washington State Department of Revenue in early April for unpaid taxes.
The suit by Columbia State Bank alleges Lapp executed a promissory note in October 2017 for an original principal of $700,000 that was increased to $1.2 million and set to mature in November 2018. This deadline was extended to February 2019, about the same time former employees first noticed an issue with their paychecks.
Five former employees reported being told by i-3 leadership that a lag in pay was a result of a changeover in bank financing, resulting in the need for paper checks instead of direct deposit. Employees said the paychecks cleared, but this was the first of future payroll issues that cropped up.
The second suit filed by IGS accuses i-3 of failing to make good on contracts written between August 2018 and January 2019, alleging that instead of paying his debts, Lapp “fraudulently spent, misappropriated, and/or diverted money from i-3 Global’s general contractor, (Mission Support Alliance), for his own personal benefit rather than on Integrated Global’s invoices.”
It says i-3 received the funds necessary to pay IGS but did not proceed with payment. The filing includes up to 10 unnamed defendants who are members of the board of directors and cites Derek Johnson of Gravis Law as i-3’s contract specialist.