Lawsuit accuses Tri-Cities entrepreneur of misusing $400,000+ in federal funds

Lawsuit accuses Tri-Cities entrepreneur of misusing $400,000+ in federal funds
(i3 Global/KAPP-KVEW)

A Washington entrepreneur with deep Tri-Cities connections is being sued over accusations he used more than $400,000 in federal funding for personal use — funding which was earmarked to pay subcontractors for Hanford work.

The lawsuit was filed Friday in Benton County Superior Court against Kristopher Lapp,
the president and founder of i3 Global, a Kennewick-based IT and media services company.

For several years, i3 Global has received hundreds of thousands of dollars in federal funding to do graphics and staffing work for the Hanford Site as a subcontractor for Mission Support Alliance.

Mission Support Alliance is a contractor for the Department of Energy and hires subcontractors to help with cleanup at the nuclear site.

In the lawsuit, plaintiff Integrated Global Staffing says it was hired as a subcontractor for i3 Global to do staffing work on at least eight occasions between August and February.

Brian Davis, attorney for Integrated Staffing, refused to comment on ongoing litigation for ethical reasons.

In the lawsuit, Integrated Global Staffing says Lapp received federal funding from MSA to pay them for their work, but that the money earmarked for that work never reached them.

“Kristopher Lapp fraudulently spent, misappropriated and/or diverted money received from i3 Global’s general contractor, MSA, for his personal benefit rather than on Integrated Global’s invoices,” the lawsuit says.

Lapp provided KAPP-KVEW with the following statement: “I am dealing with the allegations through legal means and hope to be back supporting the community I love as soon as possible.”

MSA spokesperson Rae Moss said i3 Global is one of many subcontractors the company employs to do work for Hanford. MSA pays $72 million a year for subcontracting work.

Moss said i3 Global has provided creative services such as producing brochures and flyers as well as staff augmentation, which includes finding personnel to help do IT or other work at Hanford.

At the end of March, Moss says i3 Global contacted MSA to let them know that they would no longer be able to provide services. MSA has found other subcontractors to take up the work i3 Global had been doing.

MSA generally pays its subcontractors — including i3 Global — on a monthly basis, Moss said. She said when work is completed, those involved send authorization to MSA indicating the work is done.

Moss said MSA has no oversight of how its subcontractors individually run their businesses, including further subcontracts those businesses enter into.

Lapp is deeply involved in the Tri-Cities community and is connected with, among other entitites:

Fuse/Fuse Launch: Lapp is a member of Fuse SPC, a Richland-based coworking community. President and Chief Engineer of Fuse Rocko Luongo told KAPP-KVEW that Lapp is a minority shareholder in the company, has been involved with the FuseLaunch program and has rented office space in the Fuse Coworking Space. Lapp is also currently listed as a mentor on the Fuse SPC website.
Solar Spirits: Lapp is a co-founder of Solar Spirits in Richland, which was the first distillery in the world to use solar-evacuated tubes in their distilling process. Solar Spirits marketing coordinator Mallory Miller said while Lapp is an owner in the company, he has no financial or other involvements with Solar Spirits.
Gravis Law: Gravis Law, PLLC is the registered agent in charge of Solar Spirits, LLC, according to the Washington Secretary of State’s Corporations and Charities Division. Gravis Law Founder, CEO and Managing Partner Brett Spooner and Lapp are two of the governors for Solar Spirits, LLC. The two also appear together as governors for Distilltech, Inc. Lapp is the governor of Forefront Holding Group, LLC, for which Gravis, PLLC is the registered agent. Governing persons are people or organizations that are listed on an agency’s annual report, while registered agents are named in public documents to receive notices or service of process.
Kennewick School District: Lapp has volunteered with the Kennewick School District Business/Marketing Advisory Committee. KSD Director of Communications and Public Relations Robyn Chastain told KAPP-KVEW that while Lapp has volunteered to be a guest in classrooms talking about his area of expertise previously and is still listed as a member of the committee, he has not attended any meetings this year.
City of Richland: Lapp was elected and serves on the City of Richland’s Economic Development Committee. City of Richland officials provided KAPP-KVEW with the following statement: “Matters related to Mr. Lapp’s business are seperate and unrelated to his voluntary position as a member of Richland’s Economic Development Committee. It would be premature of the city to make any determination as to his standing on the committee at this point.”
Columbia Basin College Foundation: Lapp serves on the Columbia Basin College Foundation Board of Directors. CBC Vice President for Institutional Advancement Kevin Rusch said in his experience, Lapp has been a “loyal and productive board member” and a “valued and active participant” in the organization. Rusch declined to comment on the allegations against Lapp, saying the board has not yet been able to meet to discuss the matter.
Tri-City Regional Chamber of Commerce: Lapp is currently listed as being on the Tri-City Regional Chamber of Commerce Board of Directors.

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