OIG | The Contracting Education Academy

December 12, 2018 By cs

Oversight of U.S. military’s food suppliers called into question after fraud indictment

Executives from a company responsible for providing food and water for deployed U.S. troops in Afghanistan have been charged with defrauding the government and creating a fake construction site to overstate progress on an $8 billion contract, the Justice Department said in a recently filed indictment.

The allegations came four years after the company’s predecessor pleaded guilty to criminal charges that it inflated prices for basic items that it sold to the U.S. military. Both cases emphasize how the U.S. military has struggled to curb abuses of U.S. defense spending in America’s longest-running foreign war as the U.S. military presence in Afghanistan enters its 17th year, analysts said.

On Nov. 27, the Justice Department charged Abdul Huda Farouki, Mazen Farouki and Salah Maarouf — three Virginia residents who worked with a Dubai-based company called Anham Fzco — with defrauding the U.S. military under an estimated $8 billion military supply contract.

Keep reading this article at: https://www.washingtonpost.com/business/2018/12/08/oversight-us-militarys-food-suppliers-called-into-question-after-fraud-indictment/

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.

July 30, 2018 By cs

GSA contractors working without completed security clearances

The recent revelation that the Government Services Agency (GSA) Federal Acquisition Service (FAS) permitted employees of a government contractor to work without a completed basic National Agency Check with Written Inquiries (NACI) clearance brings into question the entire process.

The inappropriateness of allowing contract personnel to perform duties prior to their being cleared to do so is troublesome.

The fact that FAS allowed several workers to slip through the system, including at least one instance which occurred after they had received an admonishment to take corrective action, makes one scratch their head.

The GSA’s Office of Inspector General (OIG) was direct in their admonishment:

“We found that FAS has not ensured that contract employees receive favorable background investigation determinations before providing them with access to sensitive government information, systems, and facilities.”

The OIG continued that allowing contract employees to work without the completed determinations put both FAS and its customers at risk.

Keep reading this article at: https://news.clearancejobs.com/2018/07/07/gsa-contractors-working-without-completed-security-clearances/

July 9, 2018 By cs

Two men face federal charges for their role in stealing government property

U.S. Attorney Josh Minkler has announced that two men are facing federal charges for their role in stealing Humvee vehicles that were meant to be destroyed and sold for scrap.

Richard S. Treloar, 63, St. Louis, Missouri, faces seven counts of conversion of government property and seven counts of false statements; co-defendant Mark W. Collier 52, Bedford, Indiana, faces seven counts of false statements.

“Theft, waste, fraud and abuse of government funds and equipment is never acceptable,” said Minkler. “When it involves stealing from our military, it is a particularly egregious offense and those responsible will be held accountable.”

Treloar owned a St. Louis based company called Treloar Enterprises International, Inc. (TEI) which contracted with the Department of Defense’s Defense Logistics Agency (DLA) to demilitarize military vehicles, mostly High Mobility Multipurpose Wheeled Vehicles commonly known as Humvees. The Humvee is a four-wheel drive military light truck capable of being outfitted with armor, ballistic glass and high-powered weapons and is currently being used in the Iraq and Afghanistan theaters.

As part of Treloar’s contract with DLA, his company was responsible for demilitarizing the Humvees which would include eliminating the functional capabilities and inherent design features of vehicles. In many cases, that included the total destruction of the Humvee. When the Humvees were demilitarized, both Treloar and Collier verified in writing that the process had been completed.

From January 2014, through November 2015, TEI took delivery of all Humvees from Naval Support Activity Crane (Crane) which is located in Southern Indiana. To facilitate the contract, TEI opened a facility in nearby Spencer, Indiana, where the purported demilitarization took place. The indictment alleges Treloar converted at least seven fully armored Humvees for his own use and sold or attempted to sell them for his own benefit. The value of the Humvees was over $589,000. Both defendants also certified that each and every Humvee was demilitarized, when in fact they were not.

This case was investigated by DoD’s Office of Inspector General-Defense Criminal Investigative Service, Naval Criminal Investigative Services, and Defense Logistics Agency’s Office of the Inspector General.

“Today’s indictments demonstrate the commitment of the Defense Criminal Investigative Service and its law enforcement partners to protect the integrity of all Department of Defense programs,” said Special Agent in Charge John F. Khin, Southeast Field Office. “DCIS’ efforts in this investigation mitigated further significant loss and waste of taxpayer dollars from this fraudulent scheme.”

“Not only is fraud of this type a serious financial crime, the equipment involved is concerning,” said Mike Wiest, Special Agent in Charge of the NCIS Southeast Field Office. “There are no legitimate civilian uses for an armored military vehicle. NCIS will continue to work with our law enforcement partners to hold accountable those who siphon resources away from America’s warfighters.”

Assistant U.S. Attorney Bradley P. Shepard who is prosecuting this case for the government, said Treloar faces up to 10 years’ imprisonment on each count of conversion of government property and Collier faces up to five years’ imprisonment on each count of false statements.

An indictment is only a charge and not evidence of guilt. All defendants are presumed innocent until proven otherwise in federal court.

In October 2017, U.S. Attorney Josh J. Minkler announced a Strategic Plan designed to shape and strengthen the District’s response to its most significant public safety challenges. This prosecution demonstrates the Office’s firm commitment to prosecuting complex, large-scale fraud schemes, particularly those that exploit positions of trust.

Source: https://www.justice.gov/usao-sdin/pr/two-men-face-federal-charges-their-role-stealing-government-property

June 27, 2018 By cs

SBA IG: 89 percent of WOSB sole source contracts were improper

Nearly 90% of women-owned small business sole source contracts reviewed by the SBA Office of Inspector General (OIG) were improper, according to a startling report issued last week.

In the study, the SBA OIG concluded that because of pervasive flaws in the award of WOSB and EDWOSB sole source contracts, “there was no assurance that these contracts were awarded to firms that were eligible to receive sole-source awards under the Program.” And if that wasn’t enough, the SBA OIG reiterated its position that, as a legal matter, it is improper to award any WOSB or EDWOSB sole source contract to a self-certified company.

The SBA OIG studied 56 WOSB and EDWOSB sole source contracts awarded between January 1, 2016 and April 30, 2017. This pool “represented 81 percent of the Program’s contracts awarded on a sole-source basis for this time period.”

The results were startling: SBA OIG determined that “Federal agencies’ contracting officers and firms did not comply with Federal regulations for 50 of the 56 Program sole-source contracts, valued at $52.2 million.” As a result, there was no assurance that these contracts were awarded to eligible WOSBs and EDWOSBs.

Keep reading this article at: http://smallgovcon.com/women-owned-small-business-program/sba-inspector-general-89-of-wosb-sole-source-contracts-were-improper/

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 recent revelation that the Government Services Agency (GSA) Federal Acquisition Service (FAS) permitted employees of a government contractor to work without a completed basic National Agency Check with Written Inquiries (NACI) clearance brings into question the entire process.

U.S. Attorney Josh Minkler has announced that two men are facing federal charges for their role in stealing Humvee vehicles that were meant to be destroyed and sold for scrap.

Nearly 90% of women-owned small business sole source contracts reviewed by the SBA Office of Inspector General (OIG) were improper, according to a startling report issued last week.

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