Fraud | The Contracting Education Academy

February 26, 2018 By cs

Bribes and kickbacks at Joint Base Charleston lead to sentencing

U.S. Attorney Beth Drake announced on Feb. 23, 2018 that Barbara Powell was sentenced in federal court in Charleston, South Carolina, for bribery of a public employee, in violation of 18 U.S.C. § 201.

Powell has been sentenced to 6 months imprisonment, 3 years supervised release, and a $12,500 fine.

The investigation in this case proved the existence of public corruption in construction contracts at the Joint Base in Charleston (JBC). JBC was formed in 2010 when the Naval Weapons Station and the Charleston Air Force base merged. As a large and aging military base, JBC hires private companies on a regular basis to renovate and/or build facilities.

Barbara Powell was a Contracting Officer (CO) at JBC, and her duties included awarding and administering construction contracts to private companies on behalf of the federal government. From 2011 until 2015, Powell solicited and received dozens of bribes from subcontractors at JBC. The value of the bribes exceeded $15,000. In return for these bribes, Powell steered projects to some subcontractors to the detriment of other subcontractors, and she forwarded the bid proposals of some subcontractors to other subcontractors that paid her bribes. Federal COs are prohibited by law from providing confidential pricing information to anyone outside the government.

The case was investigated by the Defense Criminal Investigative Service, the Federal Bureau of Investigation, and the Air Force Office of Special Investigations.

Source: https://www.justice.gov/usao-sc/pr/goose-creek-woman-sentenced-receiving-kickbacks

December 15, 2017 By cs

FY18 NDAA requires DoD to report on contract fraud

A provision in the National Defense Authorization Act (NDAA) for Fiscal Year 2018 (2018 NDAA; H.R. 2810) would require the Department of Defense (DoD) to prepare a report on defense contracting fraud.

Specifically, Section 889 of the 2018 NDAA requires the DoD to report the number of fraud-related criminal convictions of contractors over the past five fiscal years and prepare a listing of those contractors that were debarred or suspended based on their criminal conviction. The report will also require a listing of contractors having civil judgments or settlements related to fraud over the past five years. DoD will be required to provide an assessment of the dollar value of contracts awarded to these companies. The report will also include a recommendation on how to “penalize contractors repeatedly involved in fraud in connection with contracts or other transactions entered into with the Federal Government.” DoD has 180 days to prepare the report upon passage of 2018 NDAA.

This is not the first time Congress has requested such a report. A similar provision was contained in the Department of Defense Appropriations Act, 2010 requiring reporting for fiscal years 2000-2010. That report came out in October 2011.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=652162

December 14, 2017 By cs

Former contracting officer at nuclear R&D facility pleads guilty to wire fraud and money laundering

A former procurement officer employed at Sandia Corporation, the prime operator of a federally funded nuclear research and development facility, pleaded guilty Dec. 5th to charges of wire fraud and money laundering for orchestrating a scheme to obtain approximately $2.3 million in federal funds through fraudulent means and for laundering fraudulently obtained proceeds through her father’s companies.

Carla Sena, 55, of Santa Rosa, New Mexico, pleaded guilty to one count of wire fraud and one count of money laundering in the U.S. District Court of New Mexico. Sentencing will be scheduled at a later date.

According to the plea documents, Sena’s employer, Sandia Corporation, managed and operated Sandia National Laboratories (SNL), a nuclear research and development facility owned by the federal government under sponsorship of the U.S. Department of Energy (DOE).

In late 2010, Sena managed the bidding process for the award of a multi-million-dollar contract for moving services at SNL.
Sena admitted that, in anticipation of the bidding process for this contract, she created the company, New Mexico Express Movers LLC (Movers LLC), to which she awarded the multi-million-dollar contract.
Sena prepared a bid on Movers LLC’s behalf containing fraudulent misrepresentations, and submitted the bid under the name of an individual who had no knowledge of Movers LLC to conceal her involvement.
Sena also admitted that she used her position of trust to access inside information and competing bidders’ documents that she leveraged to ensure award of the contract to Movers LLC.
As a direct result of Sena’s fraudulent scheme, Movers LLC received approximately $2.3 million in federal funds between May 2011 and April 2016.
Sena also admitted that, between October 2011 and April 2015, she transferred via negotiated checks at least $643,000 of the fraudulently obtained proceeds to legitimate businesses owned by her father with the intent to conceal the source and control of those funds and her subsequent personal gain from the proceeds.

The DOE Office of Inspector General investigated the case.

Source: https://www.justice.gov/opa/pr/former-procurement-officer-federally-funded-nuclear-research-and-development-facility-pleads

November 28, 2017 By cs

Former procurement officer indicted on wire fraud and money laundering charges

A federal grand jury sitting in the District of New Mexico returned an 11-count indictment against a former procurement officer employed at Sandia National Laboratories (SNL), a nuclear research and development facility of the U.S. Department of Energy (DOE), for orchestrating a scheme to obtain a $2.3 million contract through fraudulent means.

Carla Sena, 55, of Albuquerque, New Mexico was charged with three counts of wire fraud, one count of major fraud against the United States and seven counts of money laundering.

According to the indictment, SNL was managed and operated by Sandia Corporation (Sandia) during the relevant time period. In late 2010, Sena was assigned by Sandia to manage the bidding process for the award of a contract for moving services at SNL. In anticipation thereof, Sena created New Mexico Express Movers LLC (Movers LLC), prepared a bid on Movers LLC’s behalf, and submitted the bid to Sandia under someone else’s name to conceal her involvement. Sena made several material and fraudulent misrepresentations in Movers LLC’s bid that would have resulted in disqualification, but she used her position at SNL to ensure that these misrepresentations went undetected. Sena also used her position to access other bidders’ documents and information that she in turn leveraged to ensure award of the contract to Movers LLC. As a direct result of Sena’s scheme to defraud, Movers LLC received approximately $2.3 million in DOE funds. The indictment further alleges that, between December 2011 and April 2015, Sena transferred via negotiated checks at least $643,000 of these fraudulently obtained proceeds to legitimate businesses owned by her father with the intent to conceal her subsequent use of the proceeds for personal gain.

The indictment is the result of an ongoing investigation by the DOE Office of Inspector General and is being prosecuted by the Criminal Division’s Public Integrity Section.

The fact that a defendant has been charged with a crime is merely an accusation, and the defendant is presumed innocent unless proven guilty.

Source: https://www.justice.gov/opa/pr/former-procurement-officer-federally-funded-nuclear-research-and-development-facility

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

U.S. Attorney Beth Drake announced on Feb. 23, 2018 that Barbara Powell was sentenced in federal court in Charleston, South Carolina, for bribery of a public employee, in violation of 18 U.S.C. § 201.

A provision in the National Defense Authorization Act (NDAA) for Fiscal Year 2018 (2018 NDAA; H.R. 2810) would require the Department of Defense (DoD) to prepare a report on defense contracting fraud.

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.

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