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March 22, 2021 By cs

GAO report suggests DOE should identify more instances of contractor fraud

The Government Accountability Office (GAO) has issued a report on Department of Energy (DOE) contracting, entitled “Improvements Needed to Ensure DOE Assesses Its Full Range of Contracting Fraud Risks.”

The thrust of the report is that DOE should do more to prevent and detect fraud, particularly in less-examined areas such as bid-rigging, misrepresentation of eligibility, kickbacks and gratuities, and conflicts of interest.

DOE relies on contractors to carry out its missions at laboratories and other facilities, spending approximately 80 percent of its $41 billion in total obligations on contracts.  In March 2017, GAO reviewed DOE’s approach to managing its risk of fraud and found DOE did not use leading practices, resulting in missed opportunities to mitigate the likelihood and impact of fraud.

In its most recent report, GAO examined DOE’s processes for managing contracting fraud risks and concluded that DOE has not assessed the full range of fraud risks it faces.

Despite some improvements toward combating fraud in response to GAO’s March 2017 recommendations, GAO noted that the agency’s methods for gathering information capture only top fraud risks and fail to obtain information on fraud risks for non-management and operating (M&O) contractors.

GAO reviewed nine categories of contracting fraud schemes that occurred at DOE sites, and found that DOE’s risk profiles for FY 2018 and 2019 captured five of these nine fraud schemes (billing schemes, payroll schemes, product quality, theft, contract progress schemes), but failed to capture four others: bid-rigging, misrepresentation of eligibility, kickbacks and gratuities, and conflicts of interest. The report urges DOE to give these other areas greater focus in its fraud risk planning.

Keep reading this article at: https://governmentcontractsnavigator.com/2021/01/19/gao-report-suggests-doe-should-identify-more-instances-of-contractor-fraud/

Filed Under: Government Contracting News Tagged With: abuse, bid rigging, conflict of interest, DOE, Energy Dept., fraud, GAO, gratuity, kickback, misrepresentation, waste

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

Filed Under: Government Contracting News Tagged With: abuse, bribe, bribery, conspiracy, corruption, DCIS, DOJ, fraud, Justice Dept., kickback, Marine Corps, NCIS, Secret Service

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

Filed Under: Government Contracting News Tagged With: abuse, ACID, acquisition workforce, Army, bribe, bribery, contracting officers, corruption, DCIS, DOJ, FBI, fraud, Justice Dept., kickback, Schofield Barracks

January 6, 2021 By cs

Former NGO procurement official pleads guilty to bribery in connection with USAID contracts

A former non-governmental organization (NGO) procurement official pleaded guilty in late December to paying bribes to NGO procurement officers in exchange for sensitive procurement information related to NGO contracts funded in part by the U.S. Agency for International Development (USAID). 

The USAID contracts were for the procurement of food and supplies that would ultimately be provided to those affected by various humanitarian crises, including refugees displaced by the conflict in Syria.

Ernest Halilov, 42, a citizen of Turkmenistan, pleaded guilty on Dec. 23, 2020 to one charge of federal programs bribery.  Sentencing is scheduled for March 26, 2021.

According to admissions as part of his plea agreement:

  • From January 2011 through December 2016, Halilov coordinated a bid-rigging scheme to bid on contracts procured by NGOs and funded by USAID, to support the agency’s response to various humanitarian crises.
  • Specifically, Halilov bribed two NGO officers in order to obtain confidential procurement information, such as bid evaluation information, specifications, and internal vendor rankings.
  • In turn, Halilov would provide this information to his preferred companies in exchange for kickbacks, ensuring that the companies had an advantage over other bidders, thus increasing their ability to win NGO-procured contracts.
  • Halilov also admitted that he instructed a witness to lie to law enforcement agents and destroy emails related to the investigation.

USAID-OIG investigated this case.

Source: https://www.justice.gov/opa/pr/former-ngo-procurement-official-pleads-guilty-bribery

Filed Under: Government Contracting News Tagged With: bribe, bribery, humanitarian aid, kickback, NGO, proposal evaluation, USAID

November 25, 2020 By cs

Employee of government contractor pleads guilty to fraud and kickback charges

An employee of a government contractor had pled guilty to his involvement in a scheme to overbill a contract administered by the General Services Administration (GSA) by approximately $1.25 million, and solicit and receive kickbacks from a subcontractor in exchange for providing that subcontractor valuable contract modifications.

Elmer Baker of Gulf Breeze, Florida, pleaded guilty to one count of conspiracy to violate the anti-kickback statute and four counts of wire fraud in the U.S. District Court for the District of Columbia.  Sentencing will be scheduled for a later date.

According to admissions made in connection with the plea agreement:

  • Baker served as the project manager for his company on the contract administered by the GSA.
  • After his company awarded a subcontract to a construction company for work on the facility, Baker began receiving kickbacks in the form of meals, golf sessions, vacations, and other things of value.
  • In or around 2015, Baker began demanding monetary kickbacks that were valued at 10 percent of the amount of each of the subcontract modifications that he awarded the subcontractor.
  • Baker sent the subcontractor fake invoices to make it appear as though the payments he was receiving were for legitimate work, and he set up a shell company to receive the payments.
  • Additionally, Baker took the subcontract estimates provided to him and illegally inflated them in his requests to the GSA.
  • Over the course of several subcontract modifications, Baker defrauded the GSA out of approximately $1.25 million.

Prosecution of his case was handled by the Justice Department’s Criminal Division’s Fraud Section, the nation’s leading prosecuting authority on government procurement fraud and corruption matters.

The GSA Office of Inspector General, FBI’s Washington Field Office, and the State Department Office of Inspector General were in charge of investigating this case.

Source: https://www.justice.gov/opa/pr/employee-government-contractor-pleads-guilty-fraud-and-kickback-charges

Filed Under: Government Contracting News Tagged With: abuse, Anti-Kickback Act, bribe, bribery, FBI, fraud, GSA, IG, kickback, modification, OIG, State Dept., wire fraud

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