Georgia Tech Procurement Assistance Center

  • Home
  • About Us
  • Training
    • Class Registration
    • On-demand Training
    • GTPAC COVID-19 Resource Page
    • Veterans Verification Video
    • Other Training Audio & Video
  • Useful Links
  • Team Directory
    • Albany Counselor
    • Atlanta Counselors
    • Augusta Counselor
    • Carrollton Counselor
    • Columbus Counselor
    • Gainesville Counselor
    • Savannah Counselor
    • Warner Robins Counselor
  • Directions
    • Atlanta – Training Facility
    • Atlanta – Office
    • Albany
    • Augusta
    • Carrollton
    • Columbus
    • Gainesville
    • Savannah
    • Warner Robins
  • COVID-19
  • New Client Application
  • Contact Us

Georgia men indicted in $53 million contract fraud and illegal gratuities scheme

November 6, 2015 By Andrew Smith

A federal grand jury has returned separate indictments charging John Wilkerson, age 51, of Moultrie, Georgia, and James T. Shank, age 68, of Perry, Georgia, with a wire fraud conspiracy and offering and accepting illegal gratuities, in connection with the award of more than $53 million in federal government contracts.  The indictment was returned on October 8, 2015, and recently unsealed.

SPAWARAccording to Shank’s indictment, from August 28, 2006 until he retired on June 30, 2011, he was employed as a Program Manager at the United States Navy’s Space and Naval Warfare (SPAWAR) Systems Center. Shank worked with agencies within the Department of Defense to procure telecommunications equipment, software, and related services.

According to Wilkerson’s indictment, he was a Department of Defense Account Manager for Iron Bow Technologies, LLC (Iron Bow), which provided IT consulting and other services to government and industry customers.  Wilkerson was also part owner and operated an information technology company, Superior Communications Solutions, Inc. (SCSI).

Co-Conspirator 2 was a program manager for an information technology company, Advanced C4 Solutions, or AC4S, from 2005 until 2011.  In 2011, Co-Conspirator 2 left AC4S and went to work for Wilkerson at SCSI.

The indictments allege that from September 2009 through August 2012 Shank conspired with Wilkerson and Co-Conspirator 2, to give them and the companies they worked for and/or owned an unfair competitive advantage in obtaining government contracts. In exchange, the indictments allege that Wilkerson offered, and Shank accepted, employment with SCSI while Shank was still a government employee and while he was taking official actions that benefited Wilkerson.  In addition, Wilkerson allegedly paid Shank $86,000 in the year after Shank retired from government service, funneling the payment through two other companies in order to conceal the source of the funds.

According to the indictments, Shank improperly shared information with Wilkerson and Co-Conspirator 2, and worked with them to structure the government contracts so as to give their companies an unfair advantage over other potential bidders.

For example, according to the indictment, Shank, Wilkerson, and Co-Conspirator 2 developed a request for proposal (RFP) for DO27, a contract to supply labor services for an Air Force technology project, including for overall project management services, so that AC4S would win the contract. On June 10, 2010, DO27 was awarded to AC4S in the amount of $18,332,738.10.  Wilkerson provided Co-Conspirator 2 with a quote for labor on behalf of SCSI that was less than the quote he had previously submitted on behalf of Iron Bow as their sales representative. After SCSI was selected as a subcontractor on DO27, it subcontracted with Iron Bow to provide most of the labor SCSI was supposed to provide under DO27.  Wilkerson was able to earn income from the work Iron Bow employees were doing by having SCSI act as a middleman and charging a mark-up on Iron Bow’s work.  Wilkerson and Co-Conspirator 2 then directed an SCSI employee to create false invoices supposedly documenting the hours SCSI employees spent working on DO27, which were submitted to AC4S and paid by the United States government.  SCSI received $6,794,432.98 on DO27 out of the $18 million AC4S received for providing labor for the project.

Shank also initiated the procurement process on more than 11 delivery orders that purchased telecommunications equipment and furniture as part of the Air Force project.  Those delivery orders were issued to Iron Bow in 2010 and 2011.  Shank made sure that the delivery orders included telecommunications equipment and/or furniture that were assigned SCSI-specific part numbers, thereby guaranteeing that SCSI would receive revenue from the delivery orders.  The indictment alleges that SCSI received approximately $33 million of the $35 million paid to Iron Bow under the various furniture and equipment delivery orders.

In late 2010 or early 2011, Wilkerson offered Shank employment.  Shank did not disclose that fact to anyone at SPAWAR and did not recuse himself from any of the contracts that benefited Wilkerson. In February 2011, Co-Conspirator 2 left AC4S and went to work for Wilkerson at SCSI.  According to the indictment, Co-Conspirator 2 received a $500,000 bonus when he joined SCSI, which was paid for by profit Wilkerson had earned on the furniture contracts.

By March 2011, the Air Force project was not complete and there were a number of contract disputes related to the project. Shank was directed not to take any other action related to the project without the approval of a senior manager.  Nevertheless, the indictment alleges that in April 2011, Shank accepted more than $3.7 million worth of invoices that benefited SCSI without informing the senior manager.  After Shank accepted employment with SCSI in May 2011, but was still working for SPAWAR, he allegedly approved more than $1.1 million worth of invoices that benefitted SCSI and Wilkerson.

Shank and Wilkerson face a maximum sentence of 20 years in prison for a wire fraud conspiracy; and two years in prison for offering and accepting illegal gratuities.  Shank also faces a maximum sentence of 5 years for criminal conflict of interest. Wilkerson and Shank had initial appearances in the Northern District of Georgia on October 13 and 14, 2015, respectively, and have an initial appearance scheduled in U.S. District Court in Baltimore on October 23, 2015, at 11:00 a.m.

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.  The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

United States Attorney Rod J. Rosenstein thanked Air Force OSI and the U.S. Small Business Administration Office of Inspector General for their work in the investigation.  Mr. Rosenstein praised Assistant U.S. Attorney Leo J. Wise and Philip A. Selden, who are prosecuting the case.

Source: http://www.justice.gov/usao-md/pr/former-government-employee-and-government-contractor-indicted-53-million-procurement

Filed Under: Contracting News Tagged With: Air Force, bribe, bribery, competitive advantage, corruption, DoD, FBI, fraud, kickback, National Procurement Fraud Task Force, Navy, SBA, SPAWAR

Recent Posts

  • OMB releases guidance related to small business goals
  • Are verbal agreements good enough for government contractors?
  • OMB issues guidance on impact of injunction on government contractor vaccine mandate
  • CMMC 2.0 simplifies requirements but raises risks for government contractors
  • OFCCP launches contractor portal initiating AAP verification program

Popular Topics

8(a) abuse Army bid protest budget budget cuts certification construction contract awards contracting opportunities cybersecurity DoD DOJ False Claims Act FAR federal contracting federal contracts fraud GAO Georgia Tech government contracting government contract training government trends GSA GSA Schedule GTPAC HUBZone innovation IT Justice Dept. marketing NDAA OMB SBA SDVOSB set-aside small business small business goals spending subcontracting technology VA veteran owned business VOSB wosb

Contracting News

OMB releases guidance related to small business goals

OMB issues guidance on impact of injunction on government contractor vaccine mandate

Changes coming to DOD’s Cybersecurity Maturity Model Certification under CMMC 2.0

Judge issues nationwide injunction halting enforcement of COVID-19 vaccine mandate

Nondisplacement of qualified workers is back, but with changes

Read More

Contracting Tips

Are verbal agreements good enough for government contractors?

CMMC 2.0 simplifies requirements but raises risks for government contractors

OFCCP launches contractor portal initiating AAP verification program

GAO rules that DoD may not require small business Joint Venture itself hold facility security clearance

Terminations for convenience clauses vs. mutual termination clauses

Read More

GTPAC News

VA direct access program events in 2022

Sandia National Laboratories seeks small business suppliers

Navy OSBP hosting DCAA overview (part 2) event Jan. 12, 2022

Navy OSBP hosting cybersecurity “ask me anything” event Dec. 16th

State of Georgia hosting supplier systems training on January 26, 2022

Read More

Georgia Tech News

Undergraduate enrollment growth reflects inclusive excellence

Georgia Tech delivers $4 billion in economic impact to the State of Georgia

Georgia Tech awards first round of seed grants to support team-based research

Georgia Tech announces inaugural Associate Vice President of Corporate Engagement

DoD funds Georgia Tech to enhance U.S. hypersonics capabilities

Read More

  • SAM.gov registration is free, and help with SAM is free, too
APTAC RSS Twitter GTPAC - 30th Year of Service

Copyright © 2022 · Georgia Tech - Enterprise Innovation Institute