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June 14, 2018 By AMK

Court enters judgment against couple for overcharging DLA for spare vehicle parts

A New Jersey couple has been ordered to pay $232,891.37 to the United States for overcharging the military for light assemblies for munitions vehicles for the Defense Logistics Agency (DLA).

The defendants, New Jersey residents Babu Metgud and Shubhada Kalyani, operated Shubhada Industries, a defense contractor. The United States, as the plaintiff, moved for summary judgment against Metgud and Kalyani. In granting the United States’ motion, the district court entered judgment against the individual defendants, awarding damages and imposing the maximum penalty allowable under the False Claims Act.

The case arose from a contract in which Shubhada Industries agreed to manufacture light assemblies for DLA. Instead of actually manufacturing those parts, Shubhada purchased them from a third party and charged the government a total purchase price of $73,842 — which amounted to a 5,400 percent mark-up of the cost price, according to the court’s opinion. When the government questioned the cost, Metgud justified it by explaining that costs sometimes seem very high “to untrained eyes.”

Under the False Claims Act, a person who causes false or fraudulent claims to be submitted to the government for payment is liable for three times the government’s damages, plus civil penalties for each false claim. The court’s judgment consists of three times the amount the DLA paid, plus a civil penalty of $11,000, which the court noted was “at the top of the statutory range.”

In imposing this maximum penalty, the court explained that Metgud and Kalyani did not disclose to the agency their purchase of the light assemblies from someone else. In addition, the court opined the individuals “have not been forthright or cooperative in the Government’s investigation of the claims alleged in the amended complaint,” and seemed to “shrug off” the investigation and the court proceeding.

“Those who do business with the government must treat taxpayers fairly,” said U.S. Attorney McSwain. “This case demonstrates my Office’s commitment to holding accountable defense contractors and others who try to game the system for personal profit at the military’s expense.”

The case is significant because the government, as the plaintiff and moving party at summary judgment, obtained a judgment on the merits and without a trial. It is also significant because the district court’s judgment was based in part on its conclusion that it could draw an adverse inference against the individual defendants who invoked their Fifth Amendment right against self-incrimination.

Assistant U.S. Attorney Michael S. Macko handled the case, which arose from an investigation led by the Defense Criminal Investigative Service.

Source: https://www.justice.gov/usao-edpa/pr/court-enters-judgment-against-new-jersey-couple-overcharging-military-spare-vehicle

Filed Under: Government Contracting News Tagged With: abuse, criminal activity, DCIS, DLA, DOJ, false claims, False Claims Act, fraud, Justice Dept., spare parts

May 4, 2018 By AMK

DoD Sec: Criminal charges likely amid probe into intelligence contract

Defense Secretary James Mattis has told lawmakers it’s probable that federal officials will file criminal charges as part of an ongoing investigation into a series of contracts the Army issued to help establish security forces in Iraq and Afghanistan.
U.S. Secretary of Defense James N. Mattis

The contracts were supposed to be used to help those nations build their own intelligence gathering capabilities, but audits thus far have pointed to tens of millions of dollars in potential fraud connected to at least one vendor, including for luxury vehicles and six-figure salaries paid to its employees who performed no discernible work.

The ongoing criminal investigation involves a series of agreements, beginning in 2007, that wound up costing $458 million.

According to an audit the Special Inspector General for Afghanistan Reconstruction published in July, the lion’s share of those funds went to a single subcontractor, New Century Consulting (NCC). But SIGAR concluded that because of poor recordkeeping and a reliance on vendors to grade their own performance, it’s almost impossible to determine whether the contracts’ objectives were ever met.

Keep reading this article at: https://federalnewsradio.com/acquisition/2018/04/mattis-criminal-charges-likely-amid-probe-into-intelligence-contract/

Filed Under: Government Contracting News Tagged With: Afghanistan, criminal activity, DCAA, DoD, fraud, investigation, Iraq, Senate Armed Services Committee

November 30, 2012 By AMK

EPA temporarily suspends BP from federal contracts

The Environmental Protection Agency has temporarily suspended the oil and gas conglomerate BP from receiving any new federal contracts, according to a statement released Wednesday.

Citing the environmental disaster following the Deepwater Horizon oil spill in 2010, EPA said BP’s “lack of business integrity” will bar the company from receiving any new contracts with the government until the company meets “federal business standards.” EPA said the government still will adhere to its existing agreements with the company. BP currently has major fuel contracts with the Defense Department

As part of a deal announced in mid-November that settled criminal charges with the federal government, BP will be paying nearly $4.5 billion in damages and could still face civil lawsuits in the future. In a statement released Nov 15, BP said companies “convicted of certain criminal acts can be debarred from contracting with the federal government” but it had not been “advised of the intention of any federal agency to suspend or disbar the company.”

Keep reading this article at: http://www.govexec.com/contracting/2012/11/epa-temporarily-suspends-bp-federal-contracts/59793/?oref=govexec_today_nl.

Filed Under: Government Contracting News Tagged With: business integrity, criminal activity, debar, debarment, DoD, EPA, responsibility, suspension

July 30, 2012 By AMK

Justice fails to flag contractors with a criminal history

The Justice Department is not fulfilling its requirement to update procurement databases with information on contractors with a history of criminal activity, the department’s inspector general has found.

The Bureau of Justice Assistance has neglected its responsibility to obtain and update databases with contractors “convicted of fraud or any other felony arising out of a contract with the Department of Defense” or involved in drug trafficking, according to the IG. The bureau also failed in its statutory requirement to train U.S. attorneys to use these databases, the report said.

Keep reading this article at: http://www.govexec.com/contracting/2012/07/justice-fails-flag-contractors-criminal-history/56941/?oref=govexec_today_nl.

Filed Under: Government Contracting News Tagged With: criminal activity, debarment, Justice Dept., suspension

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