Kennewick entrepreneur files for bankruptcy
I-3 Global president faces nearly $2M in lawsuits
Multiple agencies, companies and former employees are trying to figure out “where all the money went,” and whether they’ll ever get paid by a Kennewick businessman who has filed for bankruptcy after three lawsuits were filed against him and his company i-3 Global.
“If you figure out how to get the money, let me know. I’m not happy about it,” said Opris “Vince” King, an engineering subcontractor for i-3 Global, a Kennewick company once headed up by Kristopher Lapp.
The company and its former president are now the target of an investigation by the state Department of Labor and Industries for non-payment of wages and potential misappropriation of withholdings. Over a span of less than six weeks this spring, Lapp laid off all staff, was named in three lawsuits seeking nearly $2 million and filed Chapter 7 personal bankruptcy, citing more than $1 million dollars in business debts.
Lapp and i-3 Global made headlines from the start, including when the company was named the U.S. Department of Energy’s Protégé of the Year for fiscal year 2016 and was honored by the Tri-City Regional Chamber of Commerce with a Business on a Roll award.
The DOE award was presented in spring 2017 and by spring 2019 operations had come to a halt when i-3 Global laid off all direct employees and ceased operations.
The three lawsuits came in quick succession, alleging breach of contract, fraudulent spending and intentional misrepresentation. They were filed separately by Integrated Global Staffing, Columbia State Bank and E2 Consulting Engineers Inc.
Lapp filed for personal bankruptcy in mid-May, citing extensive business debts. Federal bankruptcy paperwork required filers to check a box listing the value of their debts.
Lapp chose the option ranging from $1 million to $10 million. He listed assets between $500,001 and $1 million and did not itemize either his debts or his assets, but did provide the names of creditors.
The three companies that sued Lapp are listed among the 13 creditors owed, along with Lapp himself and his personal bankruptcy attorney. In addition, Lapp said he owes money to a credit card company, an online financial services broker, the Internal Revenue Service, a Seattle attorney and one other bank.
Lapp and his bankruptcy attorney did not return requests for comment, and Lapp has since placed a restriction on incoming calls to his cellphone.
His company held federal contracts with Mission Support Alliance, CH2M Hill Plateau Remediation Co. and Pacific Northwest National Laboratory. Fluor Federal Services also is named by Lapp as a creditor and described itself as a fee-sharing subcontractor to CHPRC. The other creditors listed include two local engineers who subcontracted for i-3 Global, including King.
Through his company, VKing Tech LLC, King said he began contracting with i-3 Global in fall 2018 and stopped doing work at the end of April 2019. He declined to say exactly how much he is owed, but confirmed it is in the “thousands.”
At least three wage complaints have been filed against i-3 Global by employees who used to work at the company’s headquarters on West Clearwater Avenue in Kennewick. A letter to i-3 Global from the state Department of Labor described a “worker rights complaint alleging unauthorized deductions and unpaid final wages” in the thousands of dollars.
Half a dozen employees confirmed they still are owed wages for their final four days of work, and a few of those also complained 401(k) contributions were taken from their paychecks but not deposited in their accounts.
The state Department of Labor did not respond to requests for information or comment on the investigation, but i-3 Global had until mid-June to respond to the wage complaint. If the state determines the wages are owed, i-3 Global could be issued a citation, ordered to pay the outstanding paychecks with interest and face other potential penalties.
Washington state’s Department of Revenue filed a tax warrant for $44,000 against i-3 Global in early April for unpaid taxes. The business’ tax account was closed April 11, the same day all employees were laid off. The state confirmed the warrant is still outstanding and said it will work to recover the money by attempting to receive full payment or by offering the use of a payment plan. If this is unsuccessful, the next step would be enforced collections, which could include “garnishing receivables or bank accounts.”
The lawsuit from E2 Consulting Engineers alleges i-3 Global violated Washington’s Consumer Protection Act by certifying to government contractors that its subcontractors had been fully compensated and says its “unfair, unlawful and deceptive” acts have the ability to deceive other contractors into performing work they won’t be paid for.
Since the lawsuits filed by both IGS and E2 are connected to federal contracts, the proper use of taxpayer money could be reviewed by the Office of the Inspector General.
The OIG could not confirm an investigation of i-3 Global was underway. Additionally, the U.S. Department of Labor could not confirm it was conducting an investigation into the company, though at least one employee reported filing a complaint with the U.S. Employee Benefits Security Administration.
The lawsuit from IGS specifically named action related to contracts i-3 Global held with Mission Support Alliance, and accused Lapp of taking money for his own use instead of paying invoices. MSA said it has since terminated all contracts with i-3 Global.
Shortly before filing for bankruptcy, Lapp listed for sale his 4,200-square-foot home on West Payette Avenue in Kennewick for $850,000. The listing was withdrawn from the Multiple Listing Service within weeks.
Lapp, a co-founder of Solar Spirits Distillery, reviews local restaurants online. He described himself on Twitter as a business professional, entrepreneur and international jet-setter.
Lapp also had served as a board member at-large for the Columbia Basin College Foundation. “The CBC Foundation Board and Kris Lapp have agreed that he is taking a leave from serving on the board while he works through his current situation,” said Kevin Rusch, CBC’s vice president for institutional advancement.
Lapp remains an active member of Richland’s Economic Development Committee, though he did not attend a June meeting.
Trial dates for all three lawsuits filed against i-3 Global and Kristopher Lapp are scheduled to be heard in Benton County Superior Court in spring 2020. The first public action in Lapp’s personal bankruptcy is set for July at the Richland Federal Building.
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