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July 17, 2020 By cs

Former HR official steered sole-source $5 million training contract to friends, VA’s IG says

A former top human resources executive at the Department of Veterans Affairs improperly steered a contract to benefit two of his friends, the agency’s inspector general found in a recent report.

Peter Shelby, who briefly served as VA’s assistant secretary for human resources and administration, violated ethics laws and abused his position to award a $5 million contract to two friends.

The contract “resulted entirely in waste,” James Mitchell, VA’s acting assistant inspector general, said.

The contract was for leadership development and training for VA employees and applicant assessment tools. Shelby was friendly with the owner of the service-disabled veteran-owned small business that received the $5 million contract. He was also friends with the vice president of Blanchard, one of the subcontractors on the project, who had endorsed Shelby for the assistant secretary position back in 2017.

According to the IG, Shelby directed his staff to pursue a contract with the small business under a specific VA sole-source authority, which allows the department, under limited circumstances, to avoid the usual competitive bidding procedures. But in this case, those authorities were misused to benefit Shelby and the preferred small business, the IG said.

Keep reading this article at: https://federalnewsnetwork.com/veterans-affairs/2020/07/former-va-chco-steered-5m-training-and-development-contract-to-friends-ig-says/

Filed Under: Government Contracting News Tagged With: abuse, ethics, fraud, HR, SDVOSB, set-aside, sole source, training, VA. IG

July 14, 2020 By cs

Contractor to pay $1 million to settle claims of fraudulently representing airport work by small disadvantaged business

Williams Brothers Construction Inc. (WBCI) has agreed to pay $1 million to resolve allegations that it violated the False Claims Act by misrepresenting its use of a small disadvantaged business to obtain a federally-funded construction contract, the Department of Justice (DOJ) has announced.

“The Disadvantaged Business Enterprise (DBE) Program of the Department of Transportation creates important opportunities for small businesses to participate in construction projects paid for with federal funds,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “We will hold accountable those who misrepresent their compliance with program requirements to obtain taxpayer funds to which they are not entitled, and thereby undermine the program’s goal of supporting small businesses.”

The settlement resolves claims arising from WBCI’s construction of a new terminal building at the Peoria International Airport using Federal Aviation Administration (FAA) grant funds, and is based on the following factors:

  • The FAA grant required the use of disadvantaged business enterprises for part of the construction.
  • DOJ contends that WBCI knowingly made false representations regarding its plans to use a disadvantaged small firm on the project and then falsified documents to make it appear that an eligible business did window, glazing, and curtain wall work.
  • Instead, WBCI allegedly used that business only as a pass-through and had the work done by an ineligible company.

The settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Central District of Illinois, and U.S. DOT’s Office of Inspector General.

Readers are reminded that the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/government-contractor-pay-1-million-settle-claims-fraudulently-representing-work-small

Filed Under: Government Contracting News Tagged With: abuse, DBE, DOJ, FAA, false claims, False Claims Act, fraud, IG, Justice Dept., pass-through, pass-through contracts, settlement, small disadvantaged business, USDOT

June 16, 2020 By cs

Former DEA official pleads guilty to $4 million contract-related fraud scheme

A former Drug Enforcement Administration (DEA) public affairs officer, Garrison Courtney, has pleaded guilty to defrauding at least a dozen companies of over $4.4 million by posing falsely as a covert officer of the Central Intelligence Agency (CIA).

According to court documents, Garrison Courtney of Tampa Florida falsely claimed to be a covert officer of the CIA involved in a highly-classified program or “task force” involving various components of the intelligence community and the Department of Defense.  According to the false story told by Courtney, the supposed classified program sought to enhance the intelligence gathering capabilities of the United States government.  In truth, Courtney had never been employed by the CIA, and the task force that he described did not exist.

To accomplish the fraud, Courtney approached numerous private companies with some variation of this false story, and claimed that the companies needed to hire and pay him to create what Courtney described as “commercial cover” in order to mask his supposed affiliation with the CIA.  Courtney also fraudulently claimed that the companies would be reimbursed in the future for these salary payments, sometimes by the award of lucrative contracts from the government in connection with the supposedly classified program.

Courtney went to extraordinary lengths to perpetuate the illusion that he was a deep-cover operative.  Among other things, he:

  • falsely claimed that his identity and large portions of his conduct were classified;
  • directed victims and witnesses to sign fake nondisclosure agreements that purported to be from the government and that forbade anyone involved from speaking openly about the supposedly classified program;
  • told victims and witnesses that they were under surveillance by hostile foreign intelligence services;
  • made a show of searching people for electronic devices as part of his supposed counterintelligence methods;
  • demanded that his victims meet in sensitive compartmented information facilities to create the illusion that they were participating in a classified intelligence operation;
  • repeatedly threatened anyone who questioned his legitimacy with revocation of their security clearance and criminal prosecution if they “leaked” or continued to look into the supposedly classified information; and
  • created fake letters, purporting to have been issued by the Attorney General of the United States, which claimed to grant blanket immunity to those who participated in the supposedly classified program.

In furtherance of his scheme, Courtney created a fraudulent backstory about himself, claiming that he had served in the U.S. Army during the Gulf War, had hundreds of confirmed kills while in combat, sustained lung injuries from smoke caused by fires set to Iraq’s oil fields, and that a hostile foreign intelligence service had attempted to assassinate him by poisoning him with ricin.  All of these claims were false.

Courtney also convinced several real governmental officials that he was participating in an intelligence “task force” and asserted that they had been selected to participate in the program.  He then used those officials as unwitting props falsely to burnish his legitimacy.  For example, he directed his victims to speak with the government officials he recruited in order to verify his claims, having separately instructed those officials exactly what to say.  Courtney thereby created the false appearance to the victims that the government officials had independently validated his story, when in fact the officials merely were echoing the false information fed to them by Courtney.  At times, Courtney also convinced those officials to meet with victims inside secure government facilities, thereby furthering the false appearance of authenticity.

Through the scheme, Courtney also fraudulently gained a position working as a private contractor for the National Institutes of Health (NIH) Information Technology Acquisition and Assessment Center (NITAAC), a branch of NIH that provides acquisition support services to federal agencies.  Once he had installed himself at NITAAC, Courtney gained access to sensitive, nonpublic information about the procurements of other federal agencies being supported by NITAAC.   Courtney thereafter used that information to attempt to corrupt the procurement process by steering the award of contracts to companies where he was then also on the payroll, and used the false pretext of national security concerns to warp the process by preventing full and open competition.

Courtney’s sentencing has been scheduled for Oct. 23, 2020.

Source: https://www.justice.gov/opa/pr/former-dea-official-pleads-guilty-elaborate-4-million-fraud-scheme

Filed Under: Government Contracting News Tagged With: abuse, CIA, DEA, fraud, misrepresentation, NIH, NITAAC

June 5, 2020 By cs

Contractors to pay $2.8 million to settle False Claims Act allegations of fraudulently obtained small business contracts

Tulsa, Oklahoma-based contractor Ross Group Construction Corporation (Ross Group), and its corporate affiliates, have agreed to pay over $2.8 million to settle allegations that they violated the False Claims Act by improperly obtaining federal set-aside contracts reserved for disadvantaged small businesses, the Justice Department announced this week.   

To qualify as a small business for purposes of U.S. Small Business Administration (SBA) programs, companies must meet defined eligibility criteria, including requirements concerning size, ownership, and operational control.  The settlement with Ross Group resolves allegations that the company fraudulently induced the government to award certain small business set-aside contracts to several affiliated entities that did not meet eligibility requirements.

The government alleged that Ross Group created two companies, PentaCon LLC and C3 LLC, to obtain small business set-aside contracts for which Ross Group itself was ineligible.  Also alleged was that Ross Group maintained operational control over the day-to-day and long-term management decisions of the two purported small businesses, including controlling their financial affairs and business operations, and that, as a result, neither PentaCon nor C3 satisfied the size and eligibility requirements to participate in the set-aside programs.  Ross Group, PentaCon, and C3 allegedly concealed their affiliation from the government and knowingly misrepresented the eligibility of PentaCon and C3 for the set-aside contracts.

The settlement with Ross Group and its corporate affiliates 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 Western District of Oklahoma and is captioned United States ex rel. Southwind Construction Services, LLC v. The Ross Group Construction Corporation, et al., Case No. 15-0102-R (W.D. Okla.).  As part of the resolution of this matter, the whistleblower will receive approximately $520,000.

The settlement is the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Western District of Oklahoma, DCIS, the Inspector General Offices of the SBA, General Services Administration, and the Department of Veterans Affairs, and the Army Criminal Investigation Division Major Procurement Fraud Unit.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/oklahoma-contractors-pay-28-million-settle-false-claims-act-allegations-concerning

Filed Under: Government Contracting News Tagged With: abuse, DOJ, false claims, False Claims Act, fraud, Justice Dept., misrepresentation, ownership and control, SBA, set-aside, small business, small disadvantaged business, whistleblower

March 25, 2020 By cs

GSA reports coronavirus-related fraud and price gouging

The General Services Administration (GSA) says it has received reports of companies fraudulently claiming to be GSA vendors attempting to exploit legitimate COVID-19 concerns to mislead Federal consumers into paying exorbitant prices for products associated with COVID-19. 

If a supplier claims to be a GSA vendor, GSA advises buyers to verify their status by checking prices and details on GSA Advantage or validate the contract number and supplier details on GSA eLibrary vendor database.

In a bulletin posted on March 19, 2020, GSA advises: “Even if information seems credible, take a moment to verify.”

In addition to worries about possible scams, there are product availability issues.  Evidence of this is the recent message posted on the GSA Advantage website: “Due to current heightened demand for products which could be associated with COVID-19, please contact the vendor(s) prior to placing your order to confirm availability.”

Questions or reports of suspect fraudulent activity or price gouging with companies claiming to be GSA vendors, can be directed to GSA’s National Customer Service Center at (800) 488-3111 or via email to NCSCcustomer.service@gsa.gov.

Filed Under: Government Contracting News Tagged With: coronavirus, COVID-19, fraud, GSA, GSA Advantage, GSA Schedule, GSA Schedules, price gouging, scam, supply chain

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