Justice Dept. | The Contracting Education Academy

February 19, 2021 By cs

What to expect for False Claims Act enforcement under new Administration

Although Department of Justice (DOJ) recoveries under the False Claims Act (FCA) reached historic lows in FY2020, President Biden’s administration is poised to usher in a return to aggressive FCA enforcement.

Under President Obama, DOJ’s FCA recoveries hit all-time peaks, totaling over $5 billion in 2012, $6.1 billion in 2014, and $4.9 billion in 2016. From there, they trended consistently downward throughout the Trump Administration, averaging under $3 billion annually. Given the Biden Administration’s focus on tackling the COVID-19 pandemic and stimulating the economy, we anticipate that DOJ’s scrutiny of alleged fraud in government programs will be as probing as ever.

In the 1980s, then-Senator Biden supported the seminal 1986 amendments to the FCA, emphasizing in his Senate remarks that enforcement should enjoy bipartisan support: “Fraud against the Government is not a matter that ought to be used for political advantage. . . . It is not a matter that divides Democrats from Republicans.”

More recently, as Vice President under President Obama, Biden famously oversaw the 2009 Recovery Act in the wake of the 2008 financial crisis and touted the lower-than-average rate of fraud investigations into the stimulus spending. In 2011, he also led the Government Accountability and Transparency Board to advance efforts to detect and remediate fraud, waste, and abuse in federal programs as part of the “Campaign to Cut Waste.” When announcing this campaign, he underscored his commitment “to changing the way government works and . . . stepping up the hunt for misspent dollars.”

Keep reading this article at: https://www.mondaq.com/unitedstates/government-contracts-procurement-ppp/1035290/what-to-expect-for-false-claims-act-enforcement-under-the-biden-administration

February 1, 2021 By cs

Bus brokerage exec admits to bribing Marine Corps official in exchange for $2 million in contracts

Darrel Fitzpatrick, who also went by the name Patrick Fields, pleaded guilty on January 21 to Conspiracy to Commit Bribery, in violation of Title 18, United States Code, Sections 371 and 201(b)(1). Sentencing is set for April 29, 2021.

Fitzpatrick faces up to five years imprisonment, followed by three years of supervised release, a $250,000 fine, and a mandatory special assessment of $100.

According to court papers, in 2019:

Fitzpatrick was a senior account manager at a bus brokerage company in Atlanta that provided transportation to the U.S. Marine Corps Reserves.
That same year, Fitzpatrick started a competing transportation brokerage company called National Charter Express.
Fitzpatrick agreed to pay kickbacks to Erik Martin, a civilian employee of the Marine Corps Reserves, in exchange for Martin directing contracts to the company where he worked and, subsequently, to National Charter Express.
The conspiracy resulted in at least $2,000,000 in transportation contracts being corruptly awarded to companies associated with Fitzpatrick.
In exchange for the contract awards, Fitzpatrick wired and attempted to wire Martin over $250,000 in bribes.

The Defense Criminal Investigative Service (DCIS), the Naval Criminal Investigative Service (NCIS), and the United States Secret Service investigated this case.

Source: https://www.justice.gov/usao-edla/pr/atlanta-man-admits-bribing-us-marine-corps-official-exchange-2000000-transportation

Also see “Federal Employee Pleads Guilty to Taking $250K in Bribes over Military Transport Contracts” at: https://www.military.com/daily-news/2021/01/06/guilty-plea-military-transportation-bribery-case.html

January 27, 2021 By cs

Cybersecurity and government contracting: False Claims Act considerations

As the recent SolarWinds Orion attack makes clear, cybersecurity will be a focus in the coming years for both governmental and non-governmental entities alike.

In the federal contracting community, it has long been predicted that the government’s increased cybersecurity requirements will eventually lead to a corresponding increase in False Claims Act (FCA) litigation involving cybersecurity compliance. This prediction may soon be proven true, as a December 2020 speech from Deputy Assistant Attorney General Michael Granston specifically identified “cybersecurity related fraud” as an “area where we could see enhanced False Claims Act activity.”

This post discusses recent efforts to use the FCA to enforce cybersecurity compliance — and, based on those efforts, what government contractors may expect to see in the future.

In recent years, the government and qui tam plaintiffs have begun using the FCA to pursue alleged noncompliance with cybersecurity regulations, and some of these efforts have gained traction. For instance, in May 2019, a federal district court in California declined to dismiss a case alleging that a government contractor had falsely asserted its compliance with cybersecurity standards when entering into Department of Defense contracts. And in July 2019, the Department of Justice announced that another contractor had agreed to pay more than $8 million in connection with resolving a qui tam suit alleging failure to meet federal cybersecurity standards, marking the first settlement based on FCA allegations related to cybersecurity noncompliance.

More recently, however, at least one court rejected the attempt to build an FCA case out of alleged deviations from cybersecurity regulations.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2021/01/cybersecurity-and-government-contracting-false-claims-act-considerations/

January 18, 2021 By cs

Former Army contractor executive sentenced for role in bribery and kickback schemes

An former executive of a government contractor has been sentenced for his role in a bribery and kickback scheme where he paid bribes to secure U.S. Army contracts.

John Winslett of Bristol, Rhode Island, was sentenced on Jan. 15th to 70 months in prison, followed by three years of supervised release.

According to court documents and information presented in court, Winslett admitted he paid over $100,000 worth of bribes, between 2011 and 2018, to two U.S. Army contracting officials who worked at the Range at Schofield Barracks in Hawaii.

The bribes included cash, automobiles, and firearms. In return, Army contracting officials used their positions by awarding $19 million in U.S. Army contracts to Winslett’s employer.

Winslett further admitted that he accepted $723,333 in kickbacks from a local subcontractor in exchange for Winslett assigning those contracts to that local subcontractor.

Army-CID, DCIS and the FBI investigated this case.

Source: https://www.justice.gov/opa/pr/former-government-contractor-sentenced-role-bribery-and-kickback-scheme

January 8, 2021 By cs

Judge rules that lying about 8(a) eligibility violates False Claims Act

Another court has joined the growing chorus of judges who are singing the same tune on set-aside fraud: when a government contractor lies about its eligibility for a set-aside contract, it violates the False Claims Act, and can be sued by either the Department of Justice or a whistleblower.

The new case is United States ex rel. Montes v. Main Building Maintenance Inc., and the decision was issued on December 22, 2020, by Judge Jason Pulliam of the Western District of Texas.

This is a qui tam case brought under the False Claims Act by a whistleblower, or “relator” as it’s called under that statute. The relator alleges that two parents, Robert and Elvira Ximenes, created a company, JXM, to bid on government contracts reserved (or, in technical terms, “set aside”) for contractors that qualified for the so-called “8(a) Business Development program” for small businesses that are owned by “socially and economically disadvantaged people or entities.”

To qualify for such set-aside contracts, the business must first be “certified” as eligible by the Small Business Administration (SBA). And to be eligible for such certification, the business must make a series of representation to SBA about who both owns the business, and who controls the business.

Keep reading this article at: https://www.natlawreview.com/article/federal-judge-texas-rules-lying-about-eligibility-8a-business-development-program

Although Department of Justice (DOJ) recoveries under the False Claims Act (FCA) reached historic lows in FY2020, President Biden’s administration is poised to usher in a return to aggressive FCA enforcement.

Darrel Fitzpatrick, who also went by the name Patrick Fields, pleaded guilty on January 21 to Conspiracy to Commit Bribery, in violation of Title 18, United States Code, Sections 371 and 201(b)(1). Sentencing is set for April 29, 2021.

As the recent SolarWinds Orion attack makes clear, cybersecurity will be a focus in the coming years for both governmental and non-governmental entities alike.

An former executive of a government contractor has been sentenced for his role in a bribery and kickback scheme where he paid bribes to secure U.S. Army contracts.

Another court has joined the growing chorus of judges who are singing the same tune on set-aside fraud: when a government contractor lies about its eligibility for a set-aside contract, it violates the False Claims Act, and can be sued by either the Department of Justice or a whistleblower.

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