Gregorio Palomino, the San Antonio event planner who received a $39.1 million contract from the federal government to feed needy families early in the coronavirus pandemic, faces a lawsuit accusing him of fraud and misrepresentation.
In its suit, Fork and Garden LLC alleges that Palomino and his company CRE8AD8 violated a “joint venture agreement involving the USDA Farmers to Families Food Box Program by failing to pay plaintiff its half of the profits and by making excessive distributions to himself and/or excessive payments to family members.”
In a May 2020 interview with the Express-News, Palomino said Brownell had persuaded him to bid on the lucrative U.S. Department of Agriculture contract.
Palomino, Brownell and the attorney listed on the suit for Fork and Garden did not immediately respond to requests for comment on the lawsuit, filed this week in Bexar County District Court.
Palomino’s contract called for CRE8AD8, pronounced “Create A Date,” to buy 18 million pounds of food, pack it into 750,000 boxes of meat, dairy and produce, and transport them to food banks and other nonprofits in seven states by the end of June 2020.
In the end, CRE8AD8 fell short by nearly 250,000 boxes, according to USDA records.
The company was paid $31.5 million, about $7.6 million less than the contract allowed.
Launched by the Trump Administration, USDA’s $4 billion Farmers to Families Food Box program aimed to help farmers and ranchers redirect unsold meat, dairy and produce to hungry Americans after the coronavirus pandemic crippled the economy.
Emails obtained by the Express-News from USDA indicate several problems arose during CRE8AD8’s contract period, which ran from May 15 to June 30, 2020. The company was one of the few participants in the Food Box program whose contracts were not renewed for its second phase.
Officials with the San Antonio Food Bank and others in the produce business expressed concerns about CRE8AD8’s lack of experience with large-scale distribution and its lack of facilities.
An Express-News investigation also revealed Palomino boasted about clients, including USAA, Valero Energy Corp., Fiesta San Antonio and the North Dakota Department of Transportation, who said they had never worked with him.
The investigation also found he cited unearned professional credentials and touted business affiliations that couldn’t be verified.
Brownell’s business record was also questioned amid concerns about the USDA contract. He filed for personal bankruptcy in 2011 in South Carolina after defaulting on more than $360,000 in debt, court records showed.
“I did nothing improper in relation to my business,” Brownell wrote to the Express-News in an email in May 2020, “and all transactions of the business were thoroughly disclosed and fully scrutinized as a result of the closing and bankruptcy filing of the business, the public record of which I stand by.”
In a May 29, 2020, email, Palomino provided USDA with a spreadsheet listing 28 nonprofits he planned to deliver boxes to. The first 22 were food banks affiliated with the Feeding America food bank network.
The San Antonio Food Bank, which was scheduled to receive 108,000 boxes, topped the list. No. 2 was the Houston Food Bank, with 72,000.
But the San Antonio Food Bank received only 26,617 boxes, which Food Bank president and CEO Eric Cooper said was barely enough to meet the demand for a single week during the pandemic.
Houston received even fewer boxes: 23,832.
“I can say that to work with CRE8AD8 was very disappointing,” Brian Greene, president and CEO of the Houston Food Bank, said in December 2021.
Of the 516,150 boxes Palomino told USDA he planned to deliver in his first two weeks, he said 504,000 would go to Feeding America food banks.
In the end, he delivered only 176,571 boxes to those food banks.
In October 2021, a congressional report by a House subcommittee investigating the government’s coronavirus response blasted CRE8AD8, saying the San Antonio Food Bank complained of rotten food, wet and collapsing boxes and food delivered at unsafe temperatures.
torsborn@express-news.net
Twitter: Tom_Orsborn