Georgia Tech Procurement Assistance Center

Georgia Tech purchasing office issues fraud alert, GTPAC warns of other fraud

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Georgia TechGeorgia Tech’s purchasing office reports that unknown persons have been attempting to use Georgia Tech’s credit references to open accounts with vendors.

In addition, some vendors have received a mocked-up version of a Georgia Tech purchase order (PO).  These phony PO’s show a rendering similar to a real PO number issued by Georgia Tech.

Suppliers can validate official Georgia Tech Purchase Orders by going to the Vendor PO Validation page and entering the PO number received.  Vendors who have questions should feel free to contact purchasing.ask@business.gatech.edu

Last year, the Georgia Tech Procurement Assistance Center (GTPAC) warned businesses of similar scams involving colleges and universities in Mississippi and Minnesota.  For further details and advice on how to avoid this type of fraud, please read: http://gtpac.org/2015/08/26/fraud-alert-beware-of-unsolicited-purchase-orders-and-other-possible-government-scams

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Company owner going to prison for tax fraud involving 8(a) and DBE eligibility

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Financial Fraud Enforcement Task Force - DOJThe former president and majority stockholder of an Idaho construction company was sentenced to five years in prison this week following her plea of guilty to filing a false tax return and her conviction by a jury of conspiracy to defraud the United States, wire fraud, mail fraud, false statements, interstate transportation of property taken by fraud, conspiracy to obstruct justice, and obstruction of justice.

Elaine Martin, 69, of Meridian, Idaho, was the president of construction company MarCon, Inc.  In September 2013, after a 26-day jury trial, Martin was convicted of tax and fraud charges and sentenced to 84 months in prison.  In August 2015, the U.S. Court of Appeals for the Ninth Circuit vacated Martin’s sentence and her tax conviction and remanded for resentencing and further proceedings on the tax charge.  Today, Martin pleaded guilty to filing a false tax return and U.S. District Judge B. Lynn Winmill of the District of Idaho sentenced her to 60 months in prison on both the tax and fraud charges.  In addition to the prison term, Judge Winmill ordered Martin to pay restitution to the Internal Revenue Service (IRS) and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60 and a forfeiture money judgment of $3,084,038.05, amounts Martin previously paid.

In the plea agreement, Martin admitted that she willfully signed false and fraudulent corporate income tax returns for Marcon Inc. for tax years 2005 and 2006.  Martin also admitted that she caused these tax returns to be false and fraudulent by keeping the unreported income off of the books and that she falsely told an IRS revenue agent, who was conducting a civil audit of Marcon, that all of Marcon’s gross receipts were deposited into its Wells Fargo operating account, when in fact, Martin was diverting and depositing gross receipts into Marcon’s Bank of Cascades account.  Martin withheld the records for Marcon’s Bank of Cascades from the individual who prepared her and Marcon’s tax returns for tax years 2005 and 2006.  Martin admitted that the total tax loss was $73,678.

Martin also admitted to conspiring to defraud the SBA 8(a) Program and the U.S. Department of Transportation, Disadvantaged Business Enterprise (DBE) Program, by submitting fraudulent tax returns and making false statements concerning her finances that caused Marcon to qualify and/or remain eligible for these programs.  Martin further admitted that her behavior affected the award of contracts pursuant to the 8(a) Program and DBE Programs.  For example, Marcon’s status as an Idaho DBE affected how and what DBE goals were set for particular construction projects and helped Marcon maintain a virtual monopoly in its geographic region between 2000 and 2006.  Marcon participated in the SBA 8(a) Program pursuant to direct negotiations with the awarding agency, rather than through fair and open competition.  Martin admitted that during the relevant time period, she would not have been awarded the 33 contracts at issue in the case but for the fraud.

As part of the plea agreement that Martin entered into today, she waived her right to further appeal.

This case is an outgrowth of the Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it is the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

Source: http://www.justice.gov/opa/pr/former-idaho-construction-company-president-sentenced-prison-fraud-scheme

Fraud alert: Beware of unsolicited purchase orders and other possible government scams

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What would you do if you responded to a request for quotation, received an order, and shipped products — only to later discover that the entire transaction was fake?

This is what happened recently to a businesswoman who reported to the Georgia Tech Procurement Assistance Center (GTPAC) that she received purchase orders from two out-of-state public universities, one located in Mississippi and the other in Minnesota.  She responded by shipping goods, and sent along her invoice.

It turns out that the purchase orders were bogus.  This small business now finds that it will not receive payment and may not be able to recover the equipment that was shipped.

What are some of the lessons you can learn from this unfortunate experience?   Here are six tips:

  1. An unsolicited order from a governmental entity (e.g., agency, city, county, school) is a virtual impossibility.  If you didn’t submit a bid, chances are you won’t receive a purchase order.
  2. When you receive a purchase order, make sure it identifies the government official placing the order and is signed.
  3. Never assume that any purchase order is valid.  Call the point-of-contact (POC) listed on the order to make sure it is legitimate.  Be alert to the possibility that the phone number on the order might be bogus too.Fraud Waste Abuse
  4. Even if the order appears to be legitimate, conduct an Internet search for the purchasing office of the government buyer to see if the location and contact information line-up with what’s on the purchase order. If the contact phone numbers are different on the order and on the web site, call the buyer to inquire about the order — and be sure to call the buyer at the phone number listed on the government entity’s website.
  5. Also pay attention to the “ship to” location.  If it looks suspicious (i.e., it’s a location other than the government entity’s location), ask the buyer why it’s different.
  6. If, after checking, you suspect the purchase order to be fake, report the incident to the real government organization as well as to appropriate law enforcement authorities.

In the case brought to GTPAC’s attention, the business has reported the incidents to the purchasing offices of both universities.  She furnished them with copies of the documents she received — orders that are on official letterhead and appear to be legitimate.  She also reported the incidents to local law enforcement authorities who are investigating the locations where the equipment was shipped.

GTPAC recommends that all businesses stay alert to possible fraud in the government contracting process and in other government functions.  Here are some tips:

Remember the old saying, “If something looks too good to be true, it probably is.”   Whenever you receive a call, letter, fax or email about something involving government contracting — and it looks fishy — feel free to contact your team at GTPAC.  We’ll be glad to give you any facts we are aware of, along with suggestions about how you might best proceed.

 

 

 

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