OIG | The Contracting Education Academy

December 3, 2020 By cs

Contractor agrees to pay $18.98 million for alleged overcharges and use of unqualified labor

Cognosante LLC has agreed to pay the United States $18,987,789 to resolve allegations that it violated the False Claims Act by using unqualified labor and overcharging the United States for services provided to government agencies under two General Services Administration (GSA) contracts, the Justice Department.

Cognosante, which is headquartered in Falls Church, Virginia, provides health care and IT services and solutions to federal agencies.

GSA’s Multiple Award Schedule (MAS) contracts allow the federal government to leverage its buying power to achieve favorable pricing. Under MAS contracts, contractors negotiate with GSA to set maximum prices for goods and services subsequently ordered by agencies across the federal government. These contracts provide streamlined access to the federal marketplace.

The settlement resolves allegations that Cognosante overcharged the United States for services performed under two GSA MAS contracts, including by providing false information concerning Cognosante’s commercial discounting practices during contract negotiations. It also resolves allegations that Cognosante charged the United States for labor that failed to meet the qualifications in one of the contracts.

Cognosante investigated and disclosed to the United States the contractual violations resolved in the settlement. It received credit for its disclosure and cooperation.

The settlement was the result of a joint investigation by the GSA OIG, the U.S. Attorney’s Office for the District of Columbia, and the Civil Division’s Commercial Litigation Branch. The claims resolved by the settlement agreement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/federal-contractor-agrees-pay-1898-million-alleged-false-claims-act-caused-overcharges-and

November 30, 2020 By cs

Contractor admits to giving gifts to USDA officials to influence contract awards and obstructing federal grand jury investigation

The former vice president and CEO of Communications Resource, Inc. (CRI), has pled guilty in federal court in the District of Columbia to one count of conspiracy to violate the Procurement Integrity Act and one count of obstruction of justice.

According to court papers, Eric Schneider of Virginia admitted to giving gifts to multiple officials at the U.S. Department of Agriculture (USDA) to influence the award of contracts worth over $19.2 million to CRI and another company he controlled.

Schneider admitted to giving USDA officials Corvette wheels, concert tickets, PGA tour tickets, meals, alcohol, strip clubs, parking, concierge medical services, prescription drugs, and other cash tips.
Schneider further admitted that, as part of the conspiracy, he drafted or instructed employees to draft procurement documents in such a way as to favor the award of a multi-million dollar contract to CRI.
Schneider then provided the documents to a USDA official to whom he provided gifts, for use in the procurement process as if they had been prepared by the USDA.
Schneider also admitted to directing two of his company’s employees to destroy documents responsive to a federal grand jury subpoena.

Schneider pled guilty in U.S. District Court for the District of Columbia. A sentencing date has not yet been set. The maximum penalty for conspiracy is five years in prison and a fine of not more than $250,000 or twice the pecuniary gain or loss of the offense. The maximum penalty for obstruction of justice is ten years of imprisonment.

The Washington Field Office of the Federal Bureau of Investigation, and the Beltsville Field Office of the United States Department of Agriculture, Office of the Inspector General (OIG) investigated the case, along with assistance from the Department of Health and Human Services OIG, the Department of State OIG, and the Small Business Administration OIG.

Source: https://www.justice.gov/usao-dc/pr/usda-contractor-admits-giving-gifts-usda-officials-influence-award-contracts-and

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

March 6, 2020 By cs

Contracting official sentenced to 18 months in federal prison for role in bribery scheme to rig VA contracts

U.S. Department of Veterans Affairs official Dwane Nevins has been sentenced to serve 18 months in federal prison, followed by three years of supervised release, for corruption offenses. He took cash bribes and then extorted undercover small business owners so that he could have his “Christmas.”

We first reported on the allegations against Nevins in September 2018. Then, in January of this year, we reported on the sentencing of a businessman who conspired with Nevins. Sentencing of one more individual in this case is scheduled later this month.

According to Court records, Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by co-defendants 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 put it, the conspirators 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. At one of those sham trainings in Las Vegas, Nevada, Nevins accepted a $4,500 cash bribe from the undercover FBI agent.

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 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?”

Anthony Bueno was previously sentenced in this case to 30 months imprisonment. He was also sentenced to 63 months imprisonment for his role in a separately indicted wire fraud scheme in which he used false representations about investment opportunities to take over a million dollars from several victims.

Robert Revis pleaded guilty in April 2019 to an Information charging him with a single count of supplementing the salary of a federal official. His sentencing hearing is scheduled for March 2, 2020.

Source: https://www.justice.gov/usao-co/pr/former-veterans-affairs-official-sentenced-18-months-federal-prison-role-bribery-scheme

January 20, 2020 By cs

Businessman who tried to ‘own every dog on the track’ sentenced for conspiring to bribe VA contract specialist

The Justice Department announced in Denver last week the sentencing of a businessman who engaged in a conspiracy with a Veterans Affairs’ contracting official to manipulate contract awards to benefit a consulting company that purportedly represented service-disabled veteran owned small businesses.

Anthony Bueno was sentenced to serve 30 months in federal prison, followed by 3 years of supervised release, for his role in a conspiracy to bribe a VA official so that clients of his company would gain an unfair advantage in the VA contracting process. Bueno was remanded into custody immediately after the sentencing hearing.

The VA’s contracting official, Dwane Nevins, previously pleaded guilty in September 2019 to every count of an indictment charging him with this scheme, including counts of conspiracy, receiving bribes, extortion, and criminal conflicts of interests. He is scheduled to be sentenced on February 19, 2020.

According to court records:

Bueno and his business partner, Robert Revis, agreed to help an undercover FBI agent, who was posing as a veteran and small business owner, bribe Nevins, a contracting specialist at the VA’s Network Contracting Office in Colorado.
As part of the bribery scheme, Bueno and Revis, working with Nevins, agreed to submit bids from small businesses owned by veterans disabled during military service (one of whom was the undercover FBI agent) under contract with Buenon and Revis’ consulting company so that federal contracts would be set aside for only those companies.
As Bueno explained to the undercover agent, the conspirators would then “own all the dogs on the track,” meaning their clients were guaranteed to get the contracts.
Bueno, Revis and Nevins worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to the consulting company, or by asking the consulting company’s clients to pay Nevins directly for sham training classes related to federal contracting.

Robert Revis pleaded guilty in April 2019 to an Information charging him with a single count of supplementing the salary of a federal official. His sentencing hearing is scheduled for March 2, 2020. Bueno pleaded guilty on September 17, 2019.

Bueno has also pleaded guilty to conspiring to launder money arising from a completely separate wire fraud scheme in which he used false representations about investment opportunities to take over a million dollars from several victims. Sentencing in that case, pending before United States District Judge William J. Martinez, is scheduled for January 23, 2019.

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

Source: https://www.justice.gov/usao-co/pr/businessman-sentenced-two-and-half-years-imprisonment-conspiring-bribe-veterans-affairs

The former vice president and CEO of Communications Resource, Inc. (CRI), has pled guilty in federal court in the District of Columbia to one count of conspiracy to violate the Procurement Integrity Act and one count of obstruction of justice.

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