Bid Rigging | The Contracting Education Academy

September 21, 2018 By cs

VA official charged with taking bribes to help associates rig federal contracting process

Three men were arrested in Colorado on Wednesday of this week pursuant to warrants issued in connection with an indictment charging them with conspiring to pay and receive bribes in exchange for creating an opportunity to commit a fraud against the U.S. Department of Veterans Affairs (VA).

The defendants are also charged with paying and receiving bribes, or aiding and abetting the payment of bribes.

Dwane Nevins, a VA contracting official at the time of the alleged crimes, was separately charged in another count with extortion under color of official right and in two counts with violating the federal conflict of interest statute.

The following is alleged in the indictment:

Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by Robert Revis, Anthony Bueno and an undercover FBI agent to help them manipulate the process for bidding on federal contracts with the VA.
Revis and Bueno, working with Nevins, agreed to submit fraudulent bids from service-disabled-veteran-owned small businesses under contract with their consulting company so that federal contracts would be set aside for only those companies. As Bueno allegedly explained, they would then “own all the dogs on the track.”
Nevins, Bueno and Revis worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to their consulting company, or by asking their consulting company’s clients to pay Nevins for sham training classes related to federal contracting.

The indictment also alleges that, after complaining about not being paid by Revis and Bueno for his participation in the scheme, Nevins used his official position at the VA to extort approximately $10,000 from an undercover FBI agent, telling the agent that “the train don’t go without me. You know what I mean? I’m the engine. I’m the caboose. I’m the engine room.” Nevins also allegedly told the undercover FBI agent: “This is a business and businessmen need to get paid . . . . so I can have my Christmas, you know what I’m saying?”

The indictment alleges that the conspirators attempted to rig the process related to two particular contracts, both of which related to medical equipment and not to the construction of any VA facilities. The first contract related to the procurement of LC bead particle embolization products by a VA hospital in Salt Lake City, and the second contract related to the procurement of durable medical equipment for VA facilities located throughout the region.

The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, and the U.S. Small Business Administration Office of Inspector General.

Readers are reminded that the defendants are presumed innocent unless and until proven guilty in a court of law.

November 8, 2017 By cs

‘Fat Leonard’ probe expands to ensnare more than 60 admirals

The “Fat Leonard” corruption investigation has expanded to include more than 60 admirals and hundreds of other U.S. Navy officers under scrutiny for their contacts with a defense contractor in Asia who systematically bribed sailors with sex, liquor and other temptations, according to the Navy.

Most of the admirals are suspected of attending extravagant feasts at Asia’s best restaurants paid for by Leonard Glenn Francis, a Singapore-based maritime tycoon who made an illicit fortune supplying Navy vessels in ports from Vladivostok, Russia to Brisbane, Australia. Francis also was renowned for hosting alcohol-soaked, after-dinner parties, which often featured imported prostitutes and sometimes lasted for days, according to federal court records.

The 350-pound Francis, also known in Navy circles as “Leonard the Legend” for his wild-side lifestyle, spent decades cultivating relationships with officers, many of whom developed a blind spot to his fraudulent ways. Even while he and his firm were being targeted by Navy criminal investigators, he received VIP invitations to ceremonies in Annapolis and Pearl Harbor, where he hobnobbed with four-star admirals, according to photographs obtained by The Washington Post.

Keep reading this article at: https://www.washingtonpost.com/investigations/fat-leonard-scandal-expands-to-ensnare-more-than-60-admirals/2017/11/05/f6a12678-be5d-11e7-97d9-bdab5a0ab381_story.html

August 23, 2017 By cs

Active-duty Navy commander pleads guilty to conspiring with foreign defense contractor to defraud Navy

The latest development in the years-long “Fat Leonard” Navy contract corruption scandal is a guilty plea by an active-duty U.S. Navy commander in connection with his efforts to obstruct a federal criminal investigation of the owner and chief executive officer of a multi-national defense contracting firm headquartered in Singapore.

The plea was entered last week by Bobby Pitts who served as the officer in charge of the Navy’s Fleet Industrial Supply Command (FISC) in Singapore.

This development is the most recent in a string of guilty pleas, indictments and convictions – spanning more than three years – related to alleged fraudulent activities of Glenn Defense Marine Asia (GDMA) and its chief executive, Leonard Glenn “Fat Leonard” Francis. So far, 27 individuals have been charged in connection with the corruption and fraud investigation into GDMA. Of those charged, at least 20 are current or former Navy officials and five are GDMA executives. Several additional cases are pending. Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.” (For background, see The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

Bobby Pitts, 48, of Chesapeake, Virginia, pleaded guilty to one count of conspiracy to defraud the U.S. in connection with the NCIS’s investigation of Francis. Pitts is set to be sentenced on December 1, by U.S. Magistrate Judge Bernard Skomal of the Southern District of California, who accepted his plea on August 15, 2017.

According to admissions made as part of his plea agreement, Pitts, as part of his duties in Singapore during the period August 2009 to May 2011, learned that the Naval Criminal Investigative Service (NCIS) and several civilian employees of the Navy were investigating whether Francis was over-billing the Navy on ship husbanding contracts. Pitts had access to internal Navy documents pertaining to investigative steps that the Navy was considering and admitted that he shared this information with Francis, with the intent to impede and obstruct the Navy’s oversight of its contracts with GDMA. On Nov. 23, 2010, for example, Pitts forwarded to a representative of GDMA an internal Navy email discussing FISC’s intention to contact officials with the Royal Thai Navy to determine whether GDMA had been billing the U.S. Navy for services in fact rendered by the Thai government.

In pleading guilty, Pitts admitted, among other things, to working with Francis and other foreign-defense-contractor personnel to help them cover up GDMA’s overcharging practices with respect to providing protection to U.S. Navy forces deployed in the Western Pacific.

So far, 18 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.

The case is being prosecuted by the Fraud Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys from the Southern District of California.

Source: https://www.justice.gov/opa/pr/active-duty-us-navy-commander-pleads-guilty-conspiring-foreign-defense-contractor-defraud-us

For more information on this prosecution, see: http://contractingacademy.gatech.edu/?s=fat

August 14, 2017 By cs

Singapore executives sentenced for fraud in international Navy corruption scandal

Two former executives of foreign defense contractor Glenn Defense Marine Asia (GDMA) were sentenced on August 12, 2107 for conspiring to submit bogus claims and invoices to the U.S. Navy in an effort to win contracts and overcharge the U.S. Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme.

The case is the latest in a series of convictions spanning more than two years and involving Leonard Glenn Francis, the former CEO of GDMA, a defense contracting firm based in Singapore. Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.” (See The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

In the latest conviction, Neil Peterson, 39, and Linda Raja, 44, both of Singapore, were sentenced to 70 and 46 months, respectively, by U.S. District Judge Janis L. Sammartino of the Southern District of California. Both worked as chief deputies for GDMA, which was owned by “Fat Leonard” Francis. Peterson served as the vice president for global operations for GDMA and Raja served as GDMA’s general manager for Singapore, Australia and the Pacific Isles.

Both defendants were arrested by authorities in Singapore at the request of the U.S. government and were extradited on Oct. 28, 2016. They each pleaded guilty in May 2017 to one count of conspiracy to defraud the United States with respect to claims.

According to admissions made as part of Peterson’s and Raja’s plea agreements, they and other members of GDMA’s management team created and submitted fraudulent bids that were either entirely fictitious, contained falsified prices supposedly from actual businesses, or fraudulently stated that the business shown on the letterhead could not provide the items or services requested. In this manner, Peterson, Raja and other members of GDMA’s core management team could ensure that GDMA’s quote would be selected by the U.S. Navy as the supposed low bidder. GDMA could thus control and inflate the prices charged to the U.S. Navy without any true, competitive bidding, as required, they admitted.

Peterson and Raja admitted that they and other members of the GDMA management team knowingly created and approved fictitious port authorities with fraudulently inflated port tariff rates, and approved the presentation of such fraudulent documents to the U.S. Navy. GDMA thus charged inflated prices to the U.S. Navy, rather than what GDMA actually paid to the bona fide port authorities.

For example, Peterson and Raja admitted that for the visit of the U.S.S. Bonhomme Richard to Kota Kinabalu, Malaysia, in or about October 2012, under the direction of Peterson and other members of GDMA’s core management team, false documents and inflated invoices were presented to the U.S. Navy. The full amount billed to the U.S. Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated, Peterson and Raja admitted.

Peterson and Raja admitted that losses to the U.S. Navy exceeded $34,800,000 as a result of this scheme.

So far, 17 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.

The DCIS, NCIS and the Defense Contract Audit Agency are continuing to investigate.

See previous articles on this topic here: http://contractingacademy.gatech.edu/tag/fat-leonard/

June 20, 2017 By cs

Ex-naval attaché sentenced to 41 months in ‘Fat Leonard’ bribery case

A former U.S. naval attache to the U.S. embassy in the Philippines has been sentenced to 41 months in prison for illicitly secured diplomatic clearances for a Malaysian defense contractor in exchange for luxury watches and the services of prostitutes.

Retired Navy Capt. Michael Brooks was sentenced Friday in federal court in San Diego after pleading guilty to bribery charges last year in the Navy’s worst corruption scandal, which helped line the pockets of a Singapore-based businessman, Leonard Francis, nicknamed “Fat Leonard.”

U.S. District Judge Janis L. Sammartino ordered Brooks, 59, of Fairfax Station, Virginia, to pay a $40,000 fine and $31,000 in restitution to the U.S. Navy.

Keep reading this article at: https://www.navytimes.com/articles/ex-naval-attache-sentenced-to-41-months-in-bribery-case

See Justice Dept. news release here: https://www.justice.gov/opa/pr/former-us-naval-attach-and-military-advisor-us-ambassador-philippines-sentenced-taking-bribes

Three men were arrested in Colorado on Wednesday of this week pursuant to warrants issued in connection with an indictment charging them with conspiring to pay and receive bribes in exchange for creating an opportunity to commit a fraud against the U.S. Department of Veterans Affairs (VA).

The “Fat Leonard” corruption investigation has expanded to include more than 60 admirals and hundreds of other U.S. Navy officers under scrutiny for their contacts with a defense contractor in Asia who systematically bribed sailors with sex, liquor and other temptations, according to the Navy.

A former U.S. naval attache to the U.S. embassy in the Philippines has been sentenced to 41 months in prison for illicitly secured diplomatic clearances for a Malaysian defense contractor in exchange for luxury watches and the services of prostitutes.

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