Township wins out in IT lawsuit
Posted July 22, 2009
SHELBY TOWNSHIP — The township will not have to pay a technology company a dime for breaking its contract in 2007 after learning two of the company’s principals were under federal indictment for exports to Iraq.
Shelby Township filed suit against Rochester-based Technology Integration Group Services in September 2007, just months after it entered a contract with the information technology group, saying that it should have disclosed that Darrin and Dawn Hanna, the principals of TIGS, were under federal investigation. The pair was indicted shortly after the July 2007 contract was signed on federal charges that they conspired with others to obtain and ship components for a mobile telecommunication network and global positioning system equipment to Iraq during the administration of Saddam Hussein.
TIGS filed a counter suit against the township, stating the township was in breach of the contract it had in place and that it defamed the company.
But a Macomb County jury did not agree.
“The jury determined that TIGS committed fraud when it did not tell Shelby two key members had been indicted,” said Shelby Township Attorney Rob Huth. “The township was even awarded $1,700 for just costs incurred to go to another company right after this happened.”
Shelby hired Analyst International to be its IT provider after breaking its contract with TIGS.
The Hannas shipped items to Iraq, which included telecommunications equipment containing encryption properties — giving it dual-use military capabilities — from December 2001 until March 3, 2003, just before coalition forces attacked the country. Iraq was under embargo from 1990 until May 2003.
Dawn Hanna, 34, was sentenced in federal court March 25 to six years in prison after a federal grand jury found her guilty of embargo violation and money laundering charges in October 2008.
Darrin Hanna was acquitted of any charges against him at the same time his sister was found guilty.
“The Technology Integration Group Services had asked the jury to return a verdict of $451,000, pursuant to a contract provision it had with the township. The verdict was $0 on that claim,” Huth said. “We believed from the beginning that the whole team at Shelby acted appropriately. The jury foreman said that the jury agreed … they would have acted like Shelby did.”
The week-and-a-half-long trial in Macomb County Circuit Court culminated in jury deliberations of an hour and a half July 22, with the verdict in Shelby’s favor returned around 6:30 p.m.
“We’re thrilled; there was a lot of good support from the township in this case,” Huth said, pointing out that in addition to the FBI, both Clerk Terri Kowal and former Supervisor Ralph Maccarone testified in the township’s defense. “The jury agreed that the township should not have to share confidential information with people doing business with a sworn enemy of the United States.”
The defense will cost the township about $40,000-$50,000, but Huth said TIGS never proposed an amount less than $450,000 in settlement talks.
TIGS attorney Jennifer Frost of Waterford did not return requests for comment by press time.
About the author
Staff Writer Kristyne E. Demske covers St. Clair Shores and the Lake Shore, Lakeview and South Lake public schools for the Sentinel. Kristyne has worked for C & G Newspapers since 2004 and attended Michigan State University and Chippewa Valley High School.
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