The center was operated under contract with the New York City Department of Small Business Services and supported with federal Workforce Investment Act (WIA) funds.

As a result, the New York City Department of Small Business Services transferred Seedco's $7 million annual contract to several other nonprofit organizations.

[3] The US Attorney's Office also launched an investigation into Seedco (and seven former managers) and filed a multimillion-dollar lawsuit claiming: "SEEDCO and the Individual Defendants engaged in this fraudulent scheme to maintain SEEDCO’s contract in connection with its Upper Manhattan Workforce1 Career Center, and to acquire its contract to operate a WorkForce1 Career Center in the Bronx, as well as to increase its compensation in connection with both centers.

Each of the Individual Defendants who did not already hold the position of Center Director at the beginning of their work with SEEDCO achieved a promotion during the period in which he or she participated in the fraud.

"[4] In December 2012 Seedco agreed to pay $1.725 million as a settlement of the civil fraud lawsuit brought by the US Attorney's Office.