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March 4, 2020 By cs

IG says Pentagon awarded $876 million in contracts meant for disabled vets to ineligible companies

Small businesses owned or run by disabled veterans may have been cheated out of hundreds of millions of dollars in Defense Department contracts by unscrupulous firms who were ineligible for the awards.

This information is contained in an Inspector General’s report released to the public on Feb. 20, 2020.

The IG’s audit found that the DoD “awarded $876.8 million in contracts to ineligible contractors and did not implement procedures to ensure compliance with the Service-Disabled Veteran-Owned Small Business (SDVOSB) subcontracting requirements after the contracts were awarded.”

At least 16 of the 29 contractors reviewed in the report who received business from the DoD on the basis that they met the disabled veteran requirements were found to be ineligible, the IG’s office said.

Unless the DoD conducts better oversight, “service-disabled veterans may be in jeopardy of not receiving contract awards intended for them, and the DoD will be at risk of misreporting the amounts for SDVOSB participation,” the 29-page report states.

Keep reading this article at: https://www.military.com/daily-news/2020/02/20/pentagon-awarded-876m-contracts-meant-disabled-vets-ineligible-companies-ig.html

Filed Under: Government Contracting News Tagged With: abuse, DoD, fraud, IG, misrepresentation, SBA, SDVOSB, service disabled, sham, small business, veteran owned businesses

May 4, 2017 By AMK

Former Native corporation exec alleges ‘sham companies’ get government contracts

The Afognak Village Corporation, with 1,000 shareholders, operates about two dozen companies with nearly 5,000 employees across the United States and overseas.

Its national and worldwide reach with hundreds of millions in contracts grew from subsidiaries that qualify for Small Business Administration contracting preferences with the Department of Defense, the Federal Emergency Management Agency, the Air Force, the Navy, the Army, the Marines, the Coast Guard and other agencies.

The company describes its shareholders as descended from the village of Afognak, which was on an island just north of Kodiak hit hard by the tsunami that followed the 1964 earthquake.

Its website features 382 job listings from Japan to Alabama and from Guantanamo Bay to Iraq. Afognak ranked 130th of the top 200 federal contractors in fiscal year 2015, according to a Bloomberg analysis, with $406 million in obligations.

The process by which it emerged as a federal contracting heavyweight is at the heart of a whistleblower lawsuit with legal bills in the millions that is slowly progressing in federal court in Alaska.

According to the lawsuit filed by a former company official, Afognak and its wholly owned subsidiary, Alutiiq, LLC, created “sham” companies to become eligible for more federal contracts than allowed.

Keep reading this article at: https://www.adn.com/opinions/2017/04/25/former-native-corporation-exec-alleges-sham-companies-get-government-contracts/

Filed Under: Government Contracting News Tagged With: 8(a), abuse, Alaskan Native, Coast Guard, DoD, FEMA. Air Force, fraud, GAO, Marine Corps, Native American, Navy, SBA, sham

January 22, 2014 By AMK

Sham charged in $1.2 million veteran business fraud

A Bergen County, N.J., woman was arrested on January 8, 2014 on charges that she fraudulently represented her company as a service-disabled veteran-owned small business in order to obtain more than $1.2 million worth of government contracts set aside for disabled veterans, U.S. Attorney Paul J. Fishman announced.

Miriam Friedman, 54, of Teaneck, N.J., surrendered to special agents from the U.S. Department of Veterans Affairs (VA), Office of the Inspector General, as a result of a federal criminal complaint charging her with wire fraud. She is scheduled to make her initial appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court.

According to the unsealed complaint:

Friedman is the owner of Office Dimensions Inc., a company in Teaneck that sells furniture and design services to industrial and government customers. Friedman and her husband control Office Dimensions and all its revenues, as well as run the company’s daily operations. Neither served in the U.S. military, but Friedman’s father-in-law is a retired U.S. military veteran.

On Nov. 23, 2009, Friedman certified in a central registry for government contractors that Office Dimensions was a service-disabled veteran-owned small business. In her certification, she allegedly falsely claimed that her father-in-law was the owner and operator, even though he had very little involvement with Office Dimensions and was not service-disabled. Friedman then bid for VA contracts set aside for service-disabled veterans who own their businesses.

From January 2010 through November 2011, the VA paid Office Dimensions more than $1.2 million on fraudulently obtained contracts to which Friedman was not entitled.

The wire fraud count with which Friedman was charged is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross loss or gain cause by the offense.

U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of the Inspector General, under the direction of Special Agent in Charge Jeffrey G. Hughes; the U.S. General Services Administration, Office of the Inspector General, under the direction of Special Agent in Charge James E. Adams; and IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Scott B. McBride of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.

The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.

See District of New Jersey U.S. Attorney Office’s press release at: http://www.justice.gov/usao/nj/Press/files/Friedman,%20Miriam%20Arrest%20News%20Release.html

Filed Under: Government Contracting News Tagged With: DOJ, fraud, service disabled, set-aside, sham, VA, veteran owned business

August 28, 2012 By AMK

IG: Health care contractor benefited from sham veteran-owned businesses

Health Net Inc., a large company with revenues of $11.9 billion in 2011, encouraged a Veterans Affairs Department employee to set up a service-disabled veteran-owned small business in 2006 so Health Net could increase its own business with the department that involved re-pricing health care claims, a VA inspector general review found.

The veteran-owned business, Enterprise Technology Solutions, performed little work under its contracts with VA and instead subcontracted the work to Health Net in violation of contracting rules, according to an investigation by the VA inspector general released Monday.

The IG staff reviewed five contracts held by Enterprise Technology Solutions valued at $82 million over a two-year period.

Keep reading this article at: http://www.nextgov.com/health/2012/08/ig-health-care-contractor-benefited-sham-veteran-owned-businesses/57575/?oref=ng-flyin.

Filed Under: Government Contracting News Tagged With: abuse, fraud, IG, re-pricing, SDVOSB, sham, VA, veteran owned business

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