In spite of defense attorney Raipher Pellegrino’s attempt to blame the government for Michael Armitage’s diversion of federal transportation funds for his own personal use, Armitage is headed to prison Jan. 12.
The developer and entrepreneur who established the Berkshire Power electric plant in Agawam and drew millions in federal money for an electric bus company that never produced anything was sentenced Nov. 15 in U.S. District Court in Springfield to 66 months behind bars. He must also pay nearly $6 million in fines and restitution.
In court, Armitage was still trumpeting his intention to produce “a nickel-hydrogen battery that will be used in cars and trucks across the country”—the project that was the focus of his company, Electric Vehicles Worldwide of Pittsfield. With help from U.S. Rep. John Olver (D-Amherst), EV Worldwide, hailed as a potential economic reviver of the job-hungry Pittsfield area after its abandonment by General Electric, got millions in federal money to build electric buses and futuristic batteries to power them.
But Armitage used fraudulent claims that the project was meeting stipulated goals to draw down money he spent on personal and family expenses.
Pellegrino intimated that the government should have examined the company’s invoices more closely.
Even before his EV Worldwide startup, there were signs that Armitage engaged in questionable financial practices. In the mid-1990s he formed Power Development, the company that built the Berkshire Power gas-fired electric plant in Agawam. In 1999, he had to repay Power Development more than $1 million that he had misused; about a third had come from checks he had listed in the company’s check register as paid to other parties, but actually written to himself.
But that same year he received a government grant of $4.3 million to start EV Worldwide. The money was to be matched 50/50 with the company’s own capital and paid in stages as development goals were reached.
From November, 2004 through early July, 2006, prosecutors say, Armitage drew the money from the Federal Transit Administration for EV Worldwide’s bus and battery project by submitting fictitious or inflated invoices, or claims for expenses that were ineligible for reimbursement. Armitage and his cohorts also falsely claimed to have completed work on company projects that was designated as “milestone” work and therefore triggered the release of FTA funding.
Armitage and the “others” cheated the FTA of a total of more than $700,000, according to the prosecution. When the Inspector General of the Department of Transportation, the FTA’s parent agency, initiated an audit, say government prosecutors, Armitage lied to the auditors.
In October, 2010 Armitage pleaded guilty to 10 criminal counts: three counts of tax evasion (including failure to file tax returns from 1993 to 2006, and lying to the IRS); three counts of falsifying information to obtain approximately $1 million in loans from United Bank of West Springfield; one count of false claims and one count of conspiracy (for colluding with others to defraud the Federal Transit Administration of money); one count of making false statements to a federal official; and one count of obstructing a federal audit. Now, in addition to prison time and other fines, he must pay the Internal Revenue Service $1.5 million and return $4.3 million to the FTA and $215,000 to the Pioneer Valley Transit Authority.
