Embattled Oldsmar company goes bankrupt

OLDSMAR -- A company under investigation for allegedly guaranteeing government contracts to small businesses is seeking Chapter 11 bankruptcy protection.

Federal Verification Co. Inc., which operated out of leased space at 3925 Tampa Road in Oldsmar, says it needs a “breathing spell” after “tortious interference from competitors” and a four-year investigation by the Florida Attorney General's office that resulted in a lawsuit for violations under the Florida Deceptive and Unfair Trade Practices Act last November.

In that complaint, Attorney General Pam Bondi claims Federal Verification conducted business through more than 60 business names and 50 websites. Its manager, James Dale Sprecher, allegedly used misleading telemarketing tactics to solicit small businesses with guarantees of a contract through the U.S. General Services Administration within six months and charged upfront fees between $5,000 and $8,000. General Services is an independent agency of the federal government that provides services to government employees and offices.

In his bankruptcy filing, made April 16, Sprecher says his company no longer solicits customers. Negotiations with Bondi's office have not resolved issues his way, and Federal Verification is looking at restitution for nearly 200 customers.

Federal Verification also is embroiled in a dispute with the U.S. Department of Labor, which says the company owes $281,000 in wage and hours problems with employees.

Sprecher disputes both actions, and says he has filed lawsuits on behalf of his company against his competitors to “stem the interference.”

Gross revenue for the company was $4.9 million, according to a filing in the U.S. Bankruptcy Court Middle District of Florida. But 2014 revenues were “substantially less” since financial institutions refused to continue doing business with the company while it fights the lawsuits and investigations.

Federal Verification says it had $2.1 million in unsecured claims, primarily involving the wage dispute, as well as the restitution claims it's challenging from former customers.

Sprecher says he wants to either restructure the company during the break, or sell its remaining assets. The company listed its assets as between $100,000 and $500,000, with liabilities up to $10 million.