Justice Dept. | The Contracting Education Academy

November 16, 2018 By cs

CDC senior contracting officer sentenced for failing to disclose payments from contractor

As a result of his Nov. 8, 2017 indictment, Carlos Smiley was sentenced to federal prison on Nov. 15, 2018 for making false statements in his annual conflict of interest certification.

Smiley was a long-time federal employee, having served in positions at NASA’s Marshall Space Flight Center in Huntsville, Alabama and at DoD’s Army Aviation Systems Command in St Louis, Missouri. At the time of his indictment, he was a senior contracting branch chief at the Centers for Disease Control and Prevention (CDC) in Atlanta, and the president of the Atlanta chapter of the National Contract Management Association.

According to U.S. Attorney Byung J. “BJay” Pak, the charges and other information presented in court are:

On February 16, 2012 and January 7, 2013, Smiley completed Confidential Financial Disclosure Reports required by his position as a CDC Contracting Officer. Both times, Smiley answered “no” to the question asking whether he had received outside income.
Between September 2011 and January 2012, Smiley received several payments from A-TEK, a Virginia-based holding company that was seeking to do business with the CDC during that time.
CDC previously granted Smiley’s request to operate a company called Charisma III, Inc. as an outside business activity. After that, Smiley ostensibly received payments through Charisma III for real estate investment advice.
In 2012, A-TEK was awarded a single-source contract for the staffing of CDC field stations overseas. Smiley signed the contract as the approving contracting officer for CDC. A-TEK turned down the contract after learning of the relationship between Smiley and a representative of its holding company, who was also an A-TEK employee until fired for his conduct. Smiley failed to disclose six payments for a total of $30,600.
In 2015, CDC investigators confronted Smiley about the payments. He admitted to receiving them and to having invented the Charisma III officer whose fictitious name appeared on the purported agreement between Charisma III and the holding company for real estate investment advice.

Carlos Smiley of Roswell, Georgia was sentenced to three months in federal prison by U.S. District Judge Thomas W. Thrash, Jr. on November 15, 2018.

Smiley was also sentenced to one year of supervised release and 200 hours community service following his release from prison. He was also fined $5,000.

Smiley was convicted of the charge on July 19, 2018, after pleading guilty to making false statements.

The case was investigated by the Department of Health and Human Services, Office of the Inspector General.

Source: https://www.justice.gov/usao-ndga/pr/cdc-senior-contracting-officer-sentenced-failing-disclose-payments-contractor

November 16, 2018 By cs

Captain from Georgia is latest Navy officer caught in ‘Fat Leonard’ corruption

The 350-pound Leonard Glenn Francis — known in Navy circles as “Leonard the Legend” for his wild-side lifestyle — spent decades cultivating relationships with Navy officers, many of whom developed a blind spot to his fraudulent ways. In the past three years, 33 defendants have been charged and 22 have pleaded guilty, many admitting to accepting things of value from Francis — also known as “Fat Leonard” — in exchange for helping the contractor win and maintain contracts and overbill the Navy by millions of dollars.

On Tuesday, Nov. 13, 2018, another Navy captain pleaded guilty to criminal conflict of interest charges and a former Navy master chief was sentenced to 17 months in prison today on corruption charges. The defendants are among the latest U.S. Navy officials to plead guilty and be sentenced in the expansive corruption and fraud investigation involving foreign defense contractor “Fat Leonard” Francis and his Singapore-based ship husbanding company, Glenn Defense Marine Asia (GDMA).

Jeffrey Breslau of Cumming, Georgia pleaded guilty to one count of criminal conflict of interest before U.S. District Judge Janis Sammartino of the Southern District of California. Breslau was charged in September 2018. Retired Master Chief Ricarte Icmat David of Concepcion, Tarlac, Philippines, was sentenced by Judge Sammartino, who also ordered him to serve a year of supervised release and pay restitution of $30,000. David was charged in August 2018 and pleaded guilty in September to one count of conspiracy to commit honest services wire fraud.

According to admissions made as part of his guilty plea, from October 2009 until July 2012, Breslau was a captain in the U.S. Navy assigned as director of public affairs for the U.S. Pacific Fleet, headquartered in Pearl Harbor, Hawaii. As part of his duties, Breslau was involved in devising the Navy’s public affairs communications strategy, and provided public affairs guidance to Pacific Fleet components and other Navy commands. From August 2012 until July 2014, Breslau was assigned to the commanding officer for the Joint Public Affairs Support Element in Norfolk, Virginia, where he was responsible for leading joint crisis communications teams.

Breslau admitted that from March 2012 until September 2013, while serving in the Navy, he provided Francis with public relations consulting services, including providing advice on how to respond to issues and controversies related to Francis’s ship husbanding business with the Navy. These included issues related to port visit costs, allegations of malfeasance such as the unauthorized dumping of waste, disputes with competitors, and issues with Pacific Fleet and contracting personnel. During the course of his consulting agreement with Francis, Breslau authored, reviewed or edited at least 33 separate documents; authored at least 135 emails providing advice to Francis; provided at least 14 instances of “talking points” in advance of meetings between Francis and high ranking Navy personnel; and “ghostwrote” numerous emails on Francis’s behalf to be transmitted to Navy personnel. During the course of this consulting agreement, Francis paid Breslau approximately $65,000 without Breslau disclosing the agreement to the Navy, Breslau admitted.

As part of his guilty plea, David admitted that he was assigned various logistics positions with the Navy’s Seventh Fleet, including with the Fleet Industrial Supply Center in Yokosuka, Japan from June 2001 to July 2004; on the USS Essex from July 2004 to August 2007; on the USS Kitty Hawk from September 2007 to August 2008; and on the USS George Washington from September 2008 to July 2010. In these positions, David was responsible for ordering and verifying goods and services for the ships on which he served, including from contractors during port calls. Throughout this period, David received from Francis various things of value, including five star hotel rooms during every port visit, he admitted.

David further admitted that he repeatedly facilitated fraud by allowing Francis and GDMA to inflate the husbanding invoices to bill for services never rendered. For example, David instructed Francis to inflate invoices for the USS Essex’s anticipated November 2007 port visit to the Philippines. As David transitioned to a new position aboard the nuclear aircraft carrier USS Kitty Hawk, on or about May 8, 2008, Francis’s company paid approximately 84,637.00 Hong Kong Dollars (HKD) for hotel reservations at the Grand Hyatt Hong Kong for Navy personnel assigned to the USS Kitty Hawk including 10,396 HKD for David’s four-night stay in a Harbor View Room, David admitted.

Francis pleaded guilty in 2015 to bribery and fraud charges, admitting that he presided over a massive, decade-long conspiracy involving “scores” of U.S. Navy officials, tens of millions of dollars in fraud and millions of dollars in bribes and lavish gifts, including luxury travel, airline upgrades, five-star hotel accommodations, top-shelf alcohol, the services of prostitutes, Cuban cigars, Kobe beef and Spanish suckling pigs.

The case was investigated by DCIS, NCIS and the Defense Contract Audit Agency.

For earlier reports on this scandal, see: https://contractingacademy.gatech.edu/?s=fat

Source: https://www.justice.gov/opa/pr/former-us-navy-captain-pleads-guilty-and-former-master-chief-petty-officer-sentenced-sweeping

November 12, 2018 By cs

Northrop Grumman pays $27.5 million under False Claims Act

Nothrop Grumman Corp. on has agreed to forfeit $27.5 million under the False Claims Act while acknowledging that some employees inflated their work hours on bills for two battlefield communications contracts with the Air Force.

“Contractors that knowingly inflate their bills to the government will face serious consequences,” said Assistant Attorney General Joseph Hunt of the Justice Department’s Civil Division, in an announcement. “This settlement demonstrates, once again, that we will not tolerate those who falsely charge the armed forces or any agency of the United States to illegally profit at the expense of the American taxpayer.”

The Falls Church, Va.-based Northrop Grumman Systems Corp. agreed to settle over charges on the Air Force’s Battlefield Airborne Communications Node contract and the Dynamic Re-tasking Capability contract awarded during July 1, 2010, and Dec. 31, 2013. That action resolves allegations that the firm “billed the Air Force for labor hours purportedly incurred by individuals stationed in the Middle East who had not actually worked the hours claimed,” Justice said.

Keep reading this article at: https://www.govexec.com/contracting/2018/11/northrop-grumman-pays-2745-million-under-false-claims-act/152572

See Dept. of Justice announcement here: https://www.justice.gov/usao-sdca/pr/northrop-grumman-subsidiary-agrees-pay-3165-million-overbilling-us-air-force-civil-and

October 15, 2018 By cs

Two intelligence officials and a business owner indicted for bid rigging

Three individuals have been indicted by a federal grand jury on a variety of charges relating to procurement fraud and unlawfully disclosing and obtaining bid information concerning a contract estimated to be worth almost $1.5 million.

Kevin Kuciapinski was an active duty U.S. Air Force Major working at the National Reconnaissance Office (NRO). Randolph Stimac was an employee of the National Security Agency (NSA). Both were stationed at the Aerospace Data Facility-Colorado on Buckley Air Force Base. The third defendant, Mykhael Kuciapinski was the owner and CEO of Company G, a company that attempted to do business with the U.S. Government. She was also the wife of Kevin Kuciapinski through July 2015.

According to the indictment released by the Justice Department, beginning on August 1, 2013, and continuing through November 24, 2015, the defendants conspired with each other to unlawfully obtain and disclose source selection information prior to the award for services related to a contract for services related to NSA, a category of intelligence that involves the collection, processing, and dissemination of foreign communications in order to obtain foreign intelligence necessary to the national defense, national security, or the conduct of the foreign affairs of the United States. The alleged plan and purpose of the conspiracy was for Kevin Kuciapinski and Randolph Stimac to provide a competitive advantage to defendant Mykhael Kuciapinski’s bid or proposal by providing her information and source selection information for the contract in question.

This case was investigated by the NRO Office of the Inspector General, NSA, Defense Criminal Investigative Services, Air Force Office of Special Investigations, and the IRS-Criminal Investigation.

The charges contained in the indictment are allegations, and the defendants are presumed innocent unless and until proven guilty.

Source: https://www.justice.gov/usao-co/pr/two-intelligence-officials-and-business-owner-indicted-bid-rigging

September 21, 2018 By cs

VA official charged with taking bribes to help associates rig federal contracting process

Three men were arrested in Colorado on Wednesday of this week pursuant to warrants issued in connection with an indictment charging them with conspiring to pay and receive bribes in exchange for creating an opportunity to commit a fraud against the U.S. Department of Veterans Affairs (VA).

The defendants are also charged with paying and receiving bribes, or aiding and abetting the payment of bribes.

Dwane Nevins, a VA contracting official at the time of the alleged crimes, was separately charged in another count with extortion under color of official right and in two counts with violating the federal conflict of interest statute.

The following is alleged in the indictment:

Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by Robert Revis, Anthony Bueno and an undercover FBI agent to help them manipulate the process for bidding on federal contracts with the VA.
Revis and Bueno, working with Nevins, agreed to submit fraudulent bids from service-disabled-veteran-owned small businesses under contract with their consulting company so that federal contracts would be set aside for only those companies. As Bueno allegedly explained, they would then “own all the dogs on the track.”
Nevins, Bueno and Revis worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to their consulting company, or by asking their consulting company’s clients to pay Nevins for sham training classes related to federal contracting.

The indictment also alleges that, after complaining about not being paid by Revis and Bueno for his participation in the scheme, Nevins used his official position at the VA to extort approximately $10,000 from an undercover FBI agent, telling the agent that “the train don’t go without me. You know what I mean? I’m the engine. I’m the caboose. I’m the engine room.” Nevins also allegedly told the undercover FBI agent: “This is a business and businessmen need to get paid . . . . so I can have my Christmas, you know what I’m saying?”

The indictment alleges that the conspirators attempted to rig the process related to two particular contracts, both of which related to medical equipment and not to the construction of any VA facilities. The first contract related to the procurement of LC bead particle embolization products by a VA hospital in Salt Lake City, and the second contract related to the procurement of durable medical equipment for VA facilities located throughout the region.

The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, and the U.S. Small Business Administration Office of Inspector General.

Readers are reminded that the defendants are presumed innocent unless and until proven guilty in a court of law.

As a result of his Nov. 8, 2017 indictment, Carlos Smiley was sentenced to federal prison on Nov. 15, 2018 for making false statements in his annual conflict of interest certification.

Nothrop Grumman Corp. on has agreed to forfeit $27.5 million under the False Claims Act while acknowledging that some employees inflated their work hours on bills for two battlefield communications contracts with the Air Force.

Three individuals have been indicted by a federal grand jury on a variety of charges relating to procurement fraud and unlawfully disclosing and obtaining bid information concerning a contract estimated to be worth almost $1.5 million.

Three men were arrested in Colorado on Wednesday of this week pursuant to warrants issued in connection with an indictment charging them with conspiring to pay and receive bribes in exchange for creating an opportunity to commit a fraud against the U.S. Department of Veterans Affairs (VA).

Search this Website