Evolv, NYC subway weapons scanner partner, says staff 'engaged in misconduct' during sales

NEW YORK — Evolv, the technology company behind the Adams administration’s controversial subway system weapons scanner program, disclosed Friday that some of its employees have “engaged in misconduct” during business deals — an announcement that comes as the firm is facing several federal and local investigations.

In a statement, the Massachusetts-based Evolv said an internal review has concluded the misconduct pertains to “extra-contractual terms and conditions” appended to certain sales of the company’s products between the second quarter of 2022 and the second quarter of this year.

The sales in question involved one of Evolv’s “largest channel partners,” according to the statement.

The employees involved in the misconduct withheld information about “extra-contractual” matters from Evolv’s accounting and auditing divisions, resulting in the company incorrectly reporting between $4 million and $6 million in revenue over the period that shouldn’t have been realized, the statement says.

Evolv added it will be correcting past publicly filed financial statements and delay the submission of its most recent one, covering the period ending Sept. 30.

Evolv’s statement did not identify the employees engaged in the misconduct or the client in question. The company did not immediately return a request for comment Friday morning.

The announcement from Evolv comes as the company remains under scrutiny.

The Department of Investigation, the city government’s internal corruption watchdog, is probing a decision by Mayor Adams’ administration to enter into a pilot program with Evolv that involved the company deploying its weapons detectors in the city subway system to scan riders at turnstiles. Among other matters, sources say the DOI investigation is scrutinizing what sort of vetting the administration did before giving that deal to Evolv, whose executives include former NYPD officials.

This week the NYPD announced the 30-day Evolv pilot turned up 12 knives and no guns over the course of 30-day pilot, which was voluntary for straphangers. The NYPD also said Evolv’s scanners registered 118 false positive scans over the period.

The pilot results came after the mayor had said in late August, after the pilot’s conclusion, that the results of the testing underground had been “very impressive.” It was unclear what the pilot was testing for and neither company nor city officials would address that issue.

The mayor’s office and the NYPD have not ruled out entering into a long-term contract with Evolv for subway gun detection scanners, though they said Thursday the city hasn’t relied on the company’s technology since the pilot concluded in late August. The mayor’s office and the NYPD didn’t immediately return messages seeking comment Friday morning.

Separately from the DOI matter, the U.S. Securities and Exchange Commission and the Federal Trade Commission are investigating whether Evolv in public materials and communications with investors overstated the ability of its technology to differentiate between dangerous weapons and innocuous metallic objects. Those investigations are ongoing, and Evolv said in Friday’s release that it has turned over information to the SEC’s enforcement division about the identified misconduct.