State seeks to claw back incentives for textile maker

State officials are seeking to recoup millions of dollars from two brothers who received job grants and did not deliver promised jobs.

Karim and Rahim Sabruddin, owners of Textile Corporation of America, were sentenced to more than four years in prison earlier this year in a fraud trial. In 2017, Gov. Bill Haslam and other state officials joined the brothers to announce a new TCA manufacturing facility in Pikeville, north of Chattanooga. That project promised 1,000 jobs and the state paid the company $3 million, including $850,000 for construction costs.

According to a newly released report from the Tennessee Comptroller of the Treasury, the brothers falsified records, including related to a relationship with a large existing manufacturer in Pakistan. According to the report, the company submitted fake invoices and other falsified documents in seeking to comply with the state requirements. By 2019, according to the comptroller, no manufacturing jobs had been created.

Officials are seeking more than $7 million in restitution.

“While this investigation describes a disappointing scheme, it also highlights the need for improved accountability over state grant money,” Comptroller Jason Mumpower said in a release. “I’m encouraged to note that ECD is taking more steps to verify the validity of the information on grant applications, review supporting documentation more carefully, and ensure it is following its own policies and procedures surrounding grant awards.”

In a written statement, attorneys for the brothers said that, “Unfortunately, the Sadruddin brothers were in too much of a hurry and soon were in 'over their heads,'” and sought to blame a business partner for much of the misdeeds.