Georgia Tech Procurement Assistance Center

Recent indictments demonstrate increased focus on bid-rigging

By

Companies involved in the government contracting industry should take note that the government is honing in on anticompetitive conduct affecting government procurements.  The federal government has demonstrated an increased interest in this area, and companies should refresh and audit their compliance programs to avoid hefty civil and criminal penalties and potential prison terms for implicated employees.

In the last month, the United States Department of Justice (DOJ) has announced three sets of indictments in recent months relating to bid-rigging of various government procurements and solicitations, evidencing an increased focus on anticompetitive conduct targeting federal, state and local governments.

Continue reading at:  McDermott Will & Emery

Judge imposes maximum sentences in Fort Gordon bid-rigging conspiracy

By

Two men who took part in a bid-rigging and bribery scheme involving $54 million in contracts at Fort Gordon received the maximum prison terms of five years last Wednesday despite the recommendation from the U.S. Attorney’s office for a reduction in their sentence.

Calvin Lawyer, 60, and Dwayne O. Fulton, 59, admitted in November to their roles in the conspiracy that ran from 2008, when Lawyer retired as a full colonel and started his own business called Communications Research Engineering and Consultant Group with the goal of obtaining government contracts. But Lawyer didn’t need to compete with other contractors because he paid bribes to ensure he got no-bid contracts from his former subordinate Col. Anthony Roper.

After learning they were under investigation in 2016, Lawyer, Roper and his wife, Audra Roper, and Fulton, who worked for the large defense contractor Kratos Defense & Security Solutions inc., fabricated documents to try to cover their tracks.

Keep reading this article at: http://www.augustachronicle.com/news/20180523/judge-imposes-maximum-sentences-in-fort-gordon-bid-rigging-conspiracy

Read earlier posts about this case here:

U.S. Attorney for Southern District of GA announces results of recent procurement fraud prosecutions

By

As part of a new emphasis on procurement fraud enforcement within the Southern District of Georgia, the U.S. Attorney’s Office for the Southern District of Georgia has announced the results of a series of recent procurement fraud prosecutions.

Over the past several months, the strike force’s efforts resulted in five guilty pleas and twelve civil settlements, including the following publically available actions:

  1. United States of America v. Dwayne Fulton (1:17-CR-35)
  2. United States of America v. Calvin Lawyer (1:17-CR-35)
  3. United States of America v. Anthony Roper (1:17-CR-35)
  4. United States of America v. Audra Roper (1:17-CR-35)
  5. United States ex rel. Major Contracting Services, Inc. v. Military Training Solutions, LLC and ADCO Holdings, Inc., et al. (4:16-cv-115)
  6. United States of America v. Robert Obradovich (4:18-CR-47)

These prosecutions and civil settlements with the named individuals and entities, as well as others, stemmed from a wide variety of fraudulent conduct, including bribery of public officials, illegal kickbacks, illegal arrangements between large contracting companies and certified small or 8(a) businesses acting as “front” companies, and billing for services not rendered.  Each of the individuals who has pled guilty awaits sentencing.  The total financial recovery for the United States thus far has exceeded $7.4 million.  Several of these investigations remain ongoing.

“The Southern District of Georgia is the proud home of several major military installations that serve a vital role both in our national defense and the district’s local economy,” said United States Attorney Bobby L. Christine.  “Those who do business with these installations should be on notice – ripping off the United States will not be tolerated! This office will bring to bear the full weight of our resources to hold fraudsters accountable.”

The joint strike force that led to these convictions and settlements involved agents, investigators, and auditors from the Department of Justice, Defense Criminal Investigative Service, Army Criminal Investigation Command (Major Procurement Fraud Unit), Naval Criminal Investigative Service, the Small Business Administration Office of Inspector General.  Significant and critical assistance was also provided by civilian and military personnel from the Army, Navy, and Air Force stationed at affected military installations.

“The American public expects the Department of Defense (DoD) to spend limited taxpayer funds efficiently and economically.  Bribery and other corrupt behavior by public officials and defense contractors diverts and wastes precious dollars intended to provide critical products and services for our Warfighters.  These results demonstrate the effectiveness of investigative efforts by the Defense Criminal Investigative Service to protect the integrity of all DoD programs,” said Special Agent in Charge John F. Khin, Southeast Field Office.

“These settlements stand as proof of the tenacity of our special agents,” said Frank Robey, director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. “It is important for those who conspired to profit from illegal payments take responsibility for their actions. The settlements hold the defendants accountable and send a message to others that these violations will be taken seriously.”

“Our partnership with the joint procurement fraud strike force ensures fair and open competition for U.S. Government contracts which support the training and readiness of Marine Corps personnel,” said H. Andrew Goodridge, Special Agent in Charge, NCIS Carolinas Field Office.

“SBA OIG will aggressively investigate allegations of fraud involving SBA’s preferential contracting programs, to include false statements made to gain access to contracting opportunities set aside for small businesses,” said SBA OIG Eastern Region Special Agent-in-Charge Kevin Kupperbusch.  “SBA’s preferential contracting programs are intended to promote the economy and grow and develop small businesses across the nation.  I want to thank the U.S Attorney’s Office and our law enforcement partners for their dedication and hard work throughout these investigations.”

SBA’s General Counsel, Christopher Pilkerton said, “These successful prosecutions demonstrate the tremendous results achieved through the combined efforts of federal agencies to uncover and forcefully respond to procurement fraud.  SBA is strongly committed to identifying and aggressively pursuing instances of fraud perpetrated by those participating in SBA’s procurement programs.”

The United States was represented by Assistant United States Attorneys Brian T. Rafferty, Shannon H. Statkus, J. Thomas Clarkson, Matthew A. Josephson, and Jonathan A. Porter.  Any claims resolved by the civil settlement agreements are allegations only and there has been no determination of liability.

Each of the civil settlements resolved potential liability under the False Claims Act.  Under the False Claims Act, whistleblowers can be entitled to a portion of the amount recovered by the United States.  The United States Attorney’s Office also reminds contractors that businesses and individuals that self-disclose potential violations can be eligible for significantly reduced penalties.

If you have any information regarding potential procurement fraud, please contact Assistant United States Attorney J. Thomas Clarkson at (912) 201-2601.

Source: https://www.justice.gov/usao-sdga/pr/southern-district-georgia-announces-results-recent-criminal-and-civil-procurement-fraud

Former Army officer charged with bribery and fraud in connection with Ft. Gordon contracts

By

A retired Army colonel whose business company reportedly was used to commit bribery to obtain more than $20 million in government contracts has been charged with conspiracy.

A conspiracy charge was lodged Monday, Oct. 2, 2017 in U.S. District Court against Calvin Devear Lawyer that charges him with conspiracy, a crime punishable by up to five years.

According to court documents, Lawyer set up a company named Communications, Research, Engineering and Consultant Group before he retired from the Army after 20 years in February 2008. The purpose of the company was to try to win contracts with the U.S. government and private contractors.

But the company was used to bribe those responsible for awarding contracts and bid-rigging at Fort Gordon, according to the documents.

Keep reading this article at: http://chronicle.augusta.com/news/2017-10-03/former-army-officer-charged-conspiracy-bribe-and-commit-fraud-government-contracts

Defense contractor to pay $16 million to settle false claims allegations over small business contracts

By

Virginia-based contractor ADS Inc. and its subsidiaries have agreed to pay $16 million to settle allegations that they violated the False Claims Act by knowingly conspiring with and causing purported small businesses to submit false claims for payment in connection with fraudulently obtained small business contracts, the Department of Justice announced last week.

The settlement also resolves allegations that ADS engaged in improper bid rigging relating to certain of the fraudulently obtained contracts. The settlement with ADS ranks as one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility.

In order to qualify as a small business, companies must meet defined eligibility criteria, including requirements concerning size, ownership, and operational control.  The settlement with ADS resolves allegations that ADS, together with several purported small businesses that it controlled, fraudulently induced the government to award certain small business set-aside contracts by misrepresenting eligibility requirements. The purported small businesses affiliated with ADS include Mythics Inc., London Bridge Trading Co. Ltd., as well as MJL Enterprises LLC, which falsely claimed to be an eligible service-disabled veteran-owned company, and SEK Solutions LLC and Karda Systems LLC, both of which falsely claimed to qualify as socially or economically disadvantaged businesses under the Small Business Administration’s 8(a) Business Development Program. ADS and its affiliates allegedly concealed the companies’ affiliations with ADS and knowingly made misrepresentations concerning the size of the businesses and their eligibility as service-disabled or 8(a) qualified businesses. Finally, the settlement resolves allegations that ADS engaged in illegal bid rigging schemes that inflated or distorted prices charged to the government under certain contracts.

The settlement with ADS resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The civil lawsuit was filed in federal district court in the District of Columbia by Ameliorate Partners LLP. As part of today’s resolution, the whistleblower will receive approximately $2.9 million.

The settlement is the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorneys’ Offices for the District of Columbia and the Eastern District of Virginia, the Small Business Administration’s Office of Inspector General, and the General Services Administration’s Office of Inspector General.  The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/defense-contractor-ads-inc-agrees-pay-16-million-settle-false-claims-act-allegations

$20 million bribery, fraud indictment returned against military personnel at Fort Gordon

By

An indictment returned by a federal grand jury accuses a Fort Gordon active-duty Army colonel, his wife and a former defense contractor employee of rigging bids to defraud the government of more than $20 million.

The indictment accuses Anthony Tyrone Roper, 55, Audra Roper, 49, and Dwayne Oswald Fulton, 58, of taking part in a bribery and kickback scheme from 2008. Col. Roper, his wife and others are accused of soliciting and accepting cash bribes in exchange for rigging the award of Army contracts.

The indictment further alleges that in an attempt to hide their bribery and fraud schemes, the Ropers and Fulton attempted to obstruct an official investigation into their criminal conduct.

Keep reading this article at: http://chronicle.augusta.com/news/2017-06-08/20-million-bribery-fraud-indictment-returned-against-military-personnel-fort-gordon

 

 

Second construction company owner to enter guilty plea for bribery in connection with City of Atlanta contracts

By

Charles P. Richards, Jr., of Tucker, Georgia, was arraigned Wednesday, Feb. 8, 2017, on conspiratorial bribery charges for paying over $185,000 to obtain City of Atlanta contracts.

“From approximately 2010 to August 2015, Richards conspired with E.R. Mitchell to buy lucrative construction-related contracts with the City of Atlanta,” said U.S. Attorney John A. Horn. “Contractors who willingly participate in a pay-to-play contracting system subvert the process for those who try to compete fairly and ultimately undermine the public’s trust in government.”

On Jan. 25, 2017 Mitchell, owner of E.R. Mitchell Company and several subsidiaries, pled guilty to paying over $1,000,000 to an yet-to-be-named individual in exchange for City of Atlanta contracts.

“The arraignment of Mr. Richards illustrates once again that providing bribes in order to obtain government contracts, be it city, state, or federal, can land you in the defendant’s chair as easily as for those accepting the bribes. The FBI continues to work diligently with its various law enforcement partners and federal prosecutors in identifying, investigating, and presenting for prosecution all individuals engaged in these types of criminal public corruption schemes that undermine the legitimate and established practices of government,” said David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office.

“The citizens of Atlanta must be able to trust that government officials will perform their duties in the best interests of the communities they serve,” said Veronica Hyman-Pillot, Special Agent in Charge, IRS Criminal Investigation. “Charles Richards Jr. undermined the process of fair and open competition when he conspired with others to pay bribes in exchange for securing lucrative contracts with the City of Atlanta. Today’s announcement demonstrates our commitment to work in a collaborative effort to promote honest and ethical government at all levels.”

According to U.S. Attorney Horn, the charges, and other information presented in court, Richards serves as the owner and/or principal of the construction companies C.P. Richards Construction Co., Inc., and C.P. Richards & Associates, Inc.

In an effort to obtain construction-related contracts with the City of Atlanta, according to the Justice Dept., Richards and defendant Elvin R. Mitchell, Jr. conspired to pay an individual to obtain government contracts. From approximately 2010 to August 2015, Richards paid over $185,000 to an individual in exchange for City of Atlanta contracts, believing that some of the money would be paid to city official/s who exercised influence over the contracting process.

According to the U.S. Attorney’s office, Charles. P Richards, Jr., 64, will plead guilty on Feb. 16, 2017, before the U.S. District Court Judge Steve C. Jones.

This case is being investigated by the Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation.  First Assistant United States Attorney Kurt R. Erskine and Assistant United States Attorneys Jeffrey W. Davis, and Jill Steinberg, are prosecuting the case.

Source: https://www.justice.gov/usao-ndga/pr/second-construction-company-owner-charged-conspiring-pay-bribes-city-atlanta-contract-0

See the initial Justice Dept. announcement in this case at: https://www.justice.gov/usao-ndga/pr/construction-company-owner-charged-paying-over-1-million-bribes-city-atlanta-contracts

Retired Air Force Master Sergeant sentenced to prison for disclosing confidential bid information

By

Justice Dept. seal - CopyA retired U.S. Air Force Master Sergeant was sentenced last week in the U.S. District Court for the Southern District of Florida to 18 months in prison following his guilty plea to unlawfully disclosing confidential procurement information and filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

According to court documents, Trevor Smith retired from the U.S. Air Force in December 2012 at the rank of Master Sergeant.  From February 2009 through February 2010, Smith was deployed to Afghanistan, where he served as Supply Non-Commissioned Officer-In-Charge for the Operation Enduring Freedom/Combined Security Transition Command-Afghanistan NATO Training Mission.  In that capacity, Smith met a Fort Lauderdale-based government contractor.  As part of his plea, Smith admitted that he agreed to disclose confidential bid information on government contracts to the contractor in exchange for bribe payments.  Smith and the contractor agreed that Smith would receive two percent of all revenues on contracts that the contractor received as a result of Smith’s assistance.

In January 2010, the contractor wired $42,853.29 to Smith.  The two agreed to wait until Smith returned to the United States for more payments.  After returning to the United States, Smith set up a shell corporation called T Star Air Inc. to receive 23 additional payments totaling $220,600.  Smith also created and submitted phony invoices to conceal the scheme.  For tax years 2010 through 2012, Smith filed corporate tax returns for T Star Air that falsely claimed inflated expenses and deductions.

In addition to the prison term, U.S. District Judge Beth Bloom for the Southern District of Florida ordered Smith to pay restitution to the Internal Revenue Service (IRS) in the amount of $6,501.

Source: http://www.justice.gov/opa/pr/retired-air-force-master-sergeant-sentenced-prison-disclosing-confidential-bid-information

Despite bid-rigging and kick-backs, firm reincarnates itself to receive contracts in both NC and SC

By

A newly formed highway construction company has landed more than $27 million in new government projects across the Carolinas despite its deep ties to a discredited North Carolina paving firm barred from bidding on state contracts.

NCDOTAn Associated Press review shows Lynches River Contracting sprang into existence after Carl “Drew” Boggs pleaded guilty in August 2014 in a bid-rigging and kickback scheme involving $88 million in highway projects for his company, Boggs Paving. By court orders, Boggs Paving is barred from bidding on contracts as are its affiliates, companies with interlocking management, and those with a “common use of employees.”

Nevertheless, Boggs’ brother — and a co-owner of the barred company — David “Chris” Boggs signed paperwork last September creating Lynches River at the address of an existing Boggs Paving affiliate. He then turned ownership over to two trusts the brothers established to benefit their children. The new company also named Boggs Paving managers as its president and vice president.

SCDOTThe setup means Boggs Paving “can essentially continue to generate economic wealth for their families, which indirectly benefits the debarred wrongdoers,” South Carolina Inspector General Patrick Maley wrote in a report Thursday. Maley said the situation raised serious concerns but appeared to be legal, and he recommended new regulations to prevent similar situations in the future.

Keep reading this article at: http://www.oaoa.com/news/government/article_85ac2c31-3bff-5cf5-bef9-ec1657c1afc5.html

NC toll road moves ahead with contractor guilty of fraud

By

North Carolina transportation officials are pushing ahead with an embattled toll road outside Charlotte, even after a politically connected paving contractor involved in the $840-million project pleaded guilty last year to defrauding taxpayers.

NCDOTThe state Department of Transportation announced Thursday construction had begun on the Monroe Expressway, a 20-mile highway in Union County. The project, which had been stalled for years by a lawsuit over its environmental impact, is being built by a joint venture of three companies.

One of those firms, Boggs Paving Inc. of Monroe, pleaded guilty to conspiracy in September in what federal prosecutors described as a bid-rigging and kickback scheme involving nearly $88 million in government highway construction contracts between 2003 and 2014. Company president Carl A. “Drew” Boggs III is awaiting sentencing after pleading guilty to conspiracy and money laundering. He faces up to 25 years in prison and $500,000 in fines.

Despite that, the three-company consortium, Monroe Bypass Constructors LLC, has been paid $6.8 million by the state during the eight months since the guilty pleas were entered, according to N.C. Department of Transportation spokesman Mike Charbonneau. In addition, Boggs Paving has been paid $108,290 since September for two other road projects.

Keep reading this article at: http://www.wncn.com/story/29185407/nc-toll-road-moves-ahead-with-contractor-guilty-of-fraud

Contracting News

Read More

Contracting Tips

Read More

GTPAC News

Read More

Georgia Tech News

Read More