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Suit Alleging NY Pot Kickbacks Moved To Federal Court

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An Illinois security company is suing New York's cannabis authority for $300 million claiming that one of its board members convinced the business to do free surveillance camera work by promising it a state contract that never came, according to a lawsuit removed to federal court.

Thomas Bowling, CEO of American Smart Cities Inc., claims that he was promised a "no-bid contract" to put up surveillance poles at 300 cannabis facilities across New York state, according to his lawsuit. But the offer was pulled back once state officials "realized that they would not be able to receive kickbacks" from the deal, according to the complaint filed by American Smart Cities.

As a result, Bowling said, his company spent some $500,000 on preparations for the New York project and lost at least $8.5 million from deals it could have executed during its 18-month period. Additionally, American Smart Cities is seeking $300 million in punitive damages, according to a complaint removed to federal court last week.

The suit names as defendants New York's Office of Cannabis Management and the Dormitory Authority of the State of New York, or DASNY, a public benefit corporation that helps build not-for-profit entities in the state. It also names Reuben McDaniel, a board member of OCM and the CEO of DASNY, and Emory Alexander, who is identified in the lawsuit as McDaniel's liaison.

The notice of removal, filed by Alexander and McDaniel, pushes back on some of Bowling's claims. American Smart Cities had already filed a complaint with New York's inspector general, who ultimately dismissed the claims as "meritless," the motion said.

Alexander and McDaniel claim that they have never been served a notice of the suit, filed in New York state in June, and that they only learned about the litigation through a third party who showed them a social media post by Bowling that mentioned the suit, the motion said.

Bowling claims that his security business had at least $6 million in contracts with various entities in Illinois by the time Alexander reached out to him about an opportunity in New York.

"The projects were to occur at various locations throughout the state near dormitories in the State University of NewYork and City University of New York educational systems, along with over 300 cannabis facilities across the state of New York," the suit said.

Bowling claims that Alexander introduced him to McDaniel, who said he also could award American Smart Cities a no-bid contract without any oversight. The lawsuit goes on to say that was not true.

The suit claims that Bowling worked with the New Yorkers from October 2021 to June 2023 in a planning phase that included examining designs, defining the scope of the project, a feasibility study and cost estimates.

"The misrepresentations of the DASNY agents concerning the project awards were knowingly and maliciously made with an attempt to deceive and to force [American Smart Cities] to incur the expenses associated with the project efforts," the suit said. "They ended only when DASNY agents realized that they would not be able to receive the kickbacks from the NY projects that they desired and ended without regard to the demonstrated merits of [American Smart Cities] potential contribution to the NY projects."



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