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August 14, 2017 By AMK

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/

Filed Under: Government Contracting News Tagged With: abuse, acquisition workforce, bid rigging, bribery, conspiracy, corruption, DCAA, DCIS, DoD, DOJ, ethics, Fat Leonard, fraud, GDMA, graft, greed, investigation, Justice Dept., kickback, Navy, NCIS, waste

June 27, 2017 By AMK

Former Commerce systems security official convicted of bribery scheme

A federal jury has convicted a former information technology official with the Department of Commerce of conspiracy to pay and receive bribes, and acceptance of bribes by a public official.

According to court records and evidence presented at trial, Raushi J. Conrad served as the Director of Systems Operation and Security within the Bureau of Industry and Security (BIS), a branch of the U.S. Department of Commerce. In that position, Conrad was designated to oversee and manage a project whereby computer files were transferred from an old BIS computer network that had been infected by a virus to a new, uninfected network. Conrad was also to ensure that the transferred files were free of viruses and, in some instances, retained the full functionality of the files that had resided on the old network.

“Conrad took bribes in exchange for official acts,” explained Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “The contracting process should be one of integrity and fairness, and this case should send a strong message that public corruption will be vigorously prosecuted.”

According to court records and evidence presented at trial, while serving as the project manager for the data migration project, Conrad solicited and received bribes from James Bedford, a Virginia businessman, in return for steering a lucrative subcontract and contract to perform the data migration work to companies owned in whole or in part by Bedford. One of Bedford’s companies made $208,000 in payments to a restaurant business owned by Conrad, and many of these payments were concealed through false and fictitious invoices created by Conrad. The fake invoices made it appear that Conrad’s restaurant business had performed various services for Bedford’s company, when in fact no such services had ever been provided.

Bedford’s company also arranged for various subcontractors to perform over $7,000 worth of free renovation work at Conrad’s residence.

Bedford has pleaded guilty and is scheduled to be sentenced on June 30, 2017.

Conrad faces a maximum of 20 years in prison when sentenced on September 8. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Source: https://www.justice.gov/usao-edva/pr/former-commerce-employee-convicted-bribery-scheme

Filed Under: Government Contracting News Tagged With: abuse, bribe, bribery, Commerce Dept., conspiracy, corruption, fraud

June 23, 2017 By AMK

Deputy director of USAID pleads guilty to charges in contract-steering scheme

BethAnne Moskov, a deputy director for the U.S. Agency for International Development (USAID), has pled guilty to charges stemming from a contract-steering scheme.

Moskov pled guilty in the U.S. District Court for the District of Columbia to charges of conspiracy to defraud the United States and making false statements to law enforcement. The plea agreement, which is subject to Court approval, requires the Court to impose a sentence within the range of no prison time to a year and a day in prison.  Sentencing is scheduled for August 28, 2017.

According to the plea documents, Moskov worked from July 2012 through August 2016 as the USAID Deputy Director for the Office of Health, Infectious Disease, and Nutrition. Her office was located at USAID headquarters in Washington, D.C.  The charges involve her dealings with a person identified in the documents as “Co-Conspirator A,” a close personal friend who worked as a consultant for various projects for USAID, as well as the private sector. Moskov and “Co-Conspirator A” took trips together and was the man of honor at her wedding.

In June 2014, according to the plea documents, Moskov wanted to hire “Co-Conspirator A” for a consultancy contract. She was the approving and selecting official for the contract, and the person to be chosen for the work was to report to her. Moskov provided internal government document templates needed for the consultancy to “Co-Conspirator A.” In an e-mail at the time, Moskov told him that “we need to jump thru a few hoops and will go through the motions but you will (sic) selected in the job – any time you spend putting this together add it as days to your consultancy … thanks peaches.”

In July 2014, “Co-Conspirator A” prepared a Selection Memo and other consultancy documents from the templates for Moskov. The Selection Memo listed “Co-Conspirator A” as the highest ranked candidate. Later that month, Moskov selected him as the “best consultant to fill the project order.” The Selection Memo included language taken verbatim from the version provided by “Co-Conspirator A.”   “Co-Conspirator A” was paid a total of $22,480.85 for the consulting project, according to the plea documents.

Additionally, during an investigation, law enforcement learned that Moskov had used her government e-mail account in 2012 to ask “Co-Conspirator A” for a loan to help her in financing a house. “Co-Conspirator A” agreed to loan her the funds. In an e-mail, Moskov thanked “Co-Conspirator A” for the loan and wrote, ““Send me your CV again and let me float it here with the 2 missions as well as some of my contacts around town … there is SOOO much work going on here! I got to get you in the system.”  “Co-Conspirator A” wired her $7,100.

In December 2015, Special Agents with the USAID Office of Inspector General interviewed Moskov at USAID headquarters. She falsely stated that she had repaid the entire $7,100 loan from “Co-Conspirator A.” In reality, she had paid nothing back.

Source: https://www.justice.gov/usao-dc/pr/deputy-director-usaid-pleads-guilty-federal-charges-contract-steering-scheme

Filed Under: Government Contracting News Tagged With: abuse, bribery, conspiracy, corruption, DOJ, fraud, IG, Justice Dept., source selection, USAID, waste

June 22, 2017 By AMK

Contracts, firings, and favoritism: Explaining the latest DC government scandal

Another week, another apparent scandal involving D.C. government officials. This one gets a bit wonky, involving a city agency that isn’t often in the headlines, contract bids, and hundreds of pages of testimony before a D.C. Council committee.

D.C.’s Department of General Services oversees construction projects—and the lucrative bids for them. Director Christopher Weaver abruptly and mysteriously resigned last August. Within two weeks, it came out that Weaver stepped down rather than fire two employees, as directed by City Administrator Rashad Young, who had recalibrated how DGS evaluated bids. A heavyweight local construction company that donated to Mayor Muriel Bowser’s campaign lost out on two contracts, and it appeared the administration wasn’t happy about it.

One of the employees filed a lawsuit, suing the city and Young for $10 million, saying he was “terminated in retaliation for failing to cooperate with [the Mayor’s office’s] efforts to award the contract” to a political donor and then “publicly defam[ed] and embarass[ed].”

Ward 3 Councilmember Mary Cheh, who oversees the D.C. Council committee with oversight of DGS, decided to look into the situation. “I wanted to see if there was anything improper, but I was also interested to report if there’s nothing improper,” Cheh tells DCist about her decision to open an investigation. “It’s not a good thing for the government for allegations to swirl around, that there’s a notion that improprieties are occurring.”

Keep reading this article at: http://dcist.com/2017/06/whats_this_about_a_dgs_investigatio.php

 

Filed Under: Government Contracting News Tagged With: abuse, conspiracy, corruption, fraud, investigation, state and local government, waste

June 20, 2017 By AMK

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

Filed Under: Government Contracting News Tagged With: abuse, acquisition workforce, bid rigging, bribery, conspiracy, corruption, DCAA, DCIS, DoD, DOJ, ethics, Fat Leonard, fraud, GDMA, graft, greed, investigation, Justice Dept., kickback, Navy, NCIS, waste

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