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Owner of fraudulent Florida FEMA registration firm faces 20 years

April 17, 2017 By Andrew Smith

The U.S. Attorney’s office in Tampa, Florida announced last week that Michael Pirolo — the owner of a company that falsely and fraudulently claimed that it would “register” vendors with the Federal Emergency Management Agency (FEMA) to enable the vendors to receive preference in obtaining contracts from FEMA — has pleaded guilty to wire fraud.

Pirolo is facing a maximum penalty of 20 years in federal prison.

According to the plea agreement, Pirolo served as the president of Government Contract Registry, Inc. (GCR), doing business as FEMA Contract Registration.  He employed telemarketers who, during communications with victim-companies, falsely and fraudulently claimed that, for a fee, GCR would “register” the companies in such a way that they would receive contract preferences from FEMA.

  • The GCR telemarketers’ communications were based on instructions and scripts that they had received from Pirolo.
  • The GCR telemarketers falsely and fraudulently stated that for a one-time fee of $500, the customer would be registered with FEMA, and that this registration would place the customer company on a list of preferred vendors.
  • The GCR telemarketers also falsely stated that when the need for particular vendor services arose, FEMA would bypass the contract acquisition process, contact the registered victim-company, and then offer a no-bid contract.
  • At times, Pirolo also instructed GCR telemarketers to go back to victim-companies that had already paid the $500 one-time fee and seek renewal and payment of another fraudulent $500 fee.

To further the scheme, the GCR telemarketers provided victim-companies with an online GCR form that requested the same information as a form on FEMA’s website.

FEMA does not charge a fee to companies to complete its form, which assists the agency with market research and does not “register” companies. Completing this form is not part of the U.S. government’s contract acquisition process.

Once GCR telemarketers received the victim-companies’ information, GCR then completed and submitted the same information — online on FEMA’s website — that then enabled emails to be sent from FEMA to the victim-companies, giving the appearance that the companies had been “registered.” The FEMA emails gave GCR the appearance of legitimacy.

Approximately 1,200 victim-companies were misled by this scheme, paying GCR at least $604,500.

This case was investigated by the Inspector General offices of the Department of Homeland Security and the General Services Administration.

The Georgia Tech Procurement Assistance Center (GTPAC) reminds its clients that government agencies never charge a fee for registration in government databases.  This is certainly true with vendor databases maintained by FEMA and the government-wide vendor database called the System for Award Management, better known as SAM.

While one scam — the company featured in this article — has apparently been put out of business, there are several others still in operation, so beware!   To read more about questionable practices involving the FEMA and SAM vendor registration databases, click on the links below:

  • FEMA Vendor Registration: http://gtpac.org/2015/08/26/fema-warns-vendors-to-look-twice-at-privately-operated-registration-schemes/
  • SAM Vendor Registration: http://gtpac.org/sam-gov-registration-is-free-and-help-with-sam-is-free-too/ 

Filed Under: Contracting News Tagged With: DHS, DOJ, FEMA, FEMA registration, fraud, free SAM assistance, free SAM help, free SAM registration, GSA, IG, Justice Dept., SAM, SAM assistance, SAM registration, scam, vendor database, vendor registration

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  • SAM.gov registration is free, and help with SAM is free, too
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