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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

 

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Former Marine Corps contracting officer sentenced to 37 months for conspiracy

A former Marine Corps captain who served as a contracting officer has been sentenced to 37 months imprisonment, followed by 3 years of supervised release.

Marine CorpsDavid G. Liu was charged with Conspiracy to Violate the Procurement Integrity Act, a charge he plead guilty to earlier this year.

During the offense period, Liu served at the Combined Joint Task Force-Horn of Africa (CJTF-HOA) in Djibouti, Africa.  As a contracting officer, LIU was entrusted to evaluate bid proposals from potential suppliers and to award government contracts that were the most appropriate and advantageous for the needs of CJTF-HOA.

A Federal investigation into Liu’s activities revealed that from September 2012 until January 2013, he and two government contractors conspired to exchange and use protected procurement information of competitors for the purpose of mounting successful bids for a $495,000 Blanket Purchase Agreement (BPA).  The BPA was established by the U.S. Navy for the procurement of multimedia services in Somalia.

The investigation revealed that Liu was closely associated with the contractors and sought to abuse his position of trust as a Marine Corps contracting officer for his and their personal gain.  In furtherance of the conspiracy, Liu unlawfully provided the contractors with protected bid information submitted by competing firms that were actively seeking BPA awards.  The contractors, in turn, used the stolen bid information to craft their own proposals and undercut the competitors’ pricing and other terms.  After all the bids were submitted to CJTF-HOA and were pending Liu’s evaluation, he solicited his co-conspirators to assist him in paying down a debt he owed to a supplier on an unrelated and unauthorized “side deal” for two government vehicles.  The scheme included Liu’s creation of a sham government contract for the vehicles worth $28,000, the awarding of the contract to the Ugandan contractor, and the diversion of the resulting government funds back to Liu through a complex series of pre-ordained international wires and withdrawals.

The government contractors with whom Liu conspired were based in Jacksonville, North Carolina, and Kampala, Uganda, respectively. Contractor Monroe Allen Stueber, Jr.  pled guilty to one count of unlawfully obtaining procurement information on October 15, 2015 and was sentenced to 3 years of probation on February 23, 2016.

NCISInvestigation of this case was conducted by the Naval Criminal Investigative Service (NCIS) and Defense Criminal Investigative Service (DCIS), with the assistance of the Federal Bureau of Investigation.

Source: https://www.justice.gov/usao-ednc/pr/former-marine-corps-contracting-officer-sentenced-37-months-conspiracy

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FEMA official gets two years’ probation for revolving-door relationship with contractor

Private industry frequently considers hiring existing and former federal government employees for their experience, knowledge base and skill set. As a reaction to the continuing perception that high-level federal employees jump from government to private industry and take sensitive government information with them, over the years Congress has introduced complex and often overlapping revolving-door legislation that imposes post-government employment restrictions on certain employees. While many government employees successfully transition to the private sector, failure to observe revolving-door laws and regulations can result in severe consequences for both contractors and government employees. A recent example of what can go wrong for both such parties is the case of Timothy Cannon and the Gallup Organisation.

On April 9 2013 Judge Jackson of the District Court for the District of Columbia sentenced Timothy Cannon, former director of the human capital division at the Federal Emergency Management Agency (FEMA), to two years of probation for conflict of interest violations.

According to Cannon’s plea, he helped Gallup to acquire a $6 million contract, while at the same time pursuing employment with the company. As a result of its alleged employment discussions with Cannon and related conduct, Gallup faces potential liability for civil damages and penalties under the False Claims Act and the Procurement Integrity Act, including treble damages and disgorgement of all money received under the contract. Moreover, these types of case always raise the risk of the contractor’s suspension or debarment, which would preclude any new contract awards for up to three years. This case serves as a reminder for private contractors wishing to hire existing or former government employees that they must have rigorous internal controls in place in order to ensure compliance with post-government employment requirements.

Keep reading this article at: http://www.internationallawoffice.com/newsletters/detail.aspx?g=cb1ea107-d51f-4ad7-b375-00f8a3dad2d7&redir=1 

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