Bribery and Bid-Rigging

April 22, 2019

Three Michigan construction firms will pay $466,500 to resolve claims of bid rigging and fraudulent billing for renovation work performed at Amtrak stations for the National Railroad Passenger Corporation.   Tooles Contracting Group, LLC, Commercial Contracting Corporation, and G&B Electric, Inc., along with G&B's president James Gierlach, were alleged to have unlawfully shared bid information and inflated invoices and time records.  USAO ED MI

April 3, 2019

Sandra Ruballo and Carlos Andres Montoya were found guilty of wire-fraud, bribery, and money laundering for their role in a multi-million dollar scheme to defraud the Child Care Food Program, a federally funded food program for underprivileged children in South Florida daycare centers. The conspirators drafted fake paperwork, entered into kickback arrangements, rigged the catering bidding process and inflated annual budgets in order to secure federal funds for their own personal benefit. Ruballo is scheduled to be sentenced on May 8, 2019. Montoya is scheduled to be sentenced on June 5, 2019. Each defendant faces a maximum statutory sentence of 20 years’ imprisonment. DOJ

March 20, 2019

South Korean companies Hyundai Oilbank Co. Ltd. and S-Oil Corporation will plead guilty and pay $127 million in fines to resolve criminal and civil claims arising from the defendants’ alleged bid-rigging and price-fixing in contracts to supply fuel to U.S. military bases in South Korea.  The settlement, the second announced by DOJ in an ongoing investigation, resolves criminal conspiracy and antitrust claims, as well as civil antitrust and False Claims Act violations related to the bid-rigging conspiracy. DOJ

February 22, 2019

Mark Cundiff of Macon, Georgia, was sentenced to three years in prison and ordered to pay restitution of $380,000 to the federal government.  Cundiff, a former DOD employee at Robins Air Force Base, was responsible for soliciting bids for new contracts at the base.  Cundiff accepted cash payments of $2,000-$8,00 monthly over the course of almost ten years from co-defendant Raymond Williams (previously sentenced to five years in prison) in exchange for drafting bid solicitation Performance Work Statements in such a way that the contracts could only be met by Williams and his companies, US Technology Corporation and US Technology Aerospace Engineering Corporation.  The UST companies and Williams received almost $14.5 million in government contracts as a result of the bribery scheme.  USAO MD GA

February 20, 2019

Clifton Burch and Peter McKean have been found guilty by a jury for conspiring to submit fraudulently rigged bids for construction at the Lawrence Berkeley National Laboratory, which is paid for and overseen by the Department of Energy.  Burch and McKean agreed to and did submit bids that were not genuine, but were intended to be higher than a $5.7 million bid submitted to the DOE by a “developer” who would then pay them.  The "developer" was, in fact, an undercover agent.  USAO ND Cal

February 15, 2019

James King of Baltimore, Maryland, a former official with the Department of Veterans Affairs, was sentenced to 11 years in prison following his guilty plea for soliciting and receiving bribes from three for-profit schools that enrolled disabled military veterans.  The VA paid over $2 million to the schools that paid the bribes through its Vocational Rehabilitation and Employment Program.  DOJ

February 8, 2019

In connection with alleged fraud on a multi-billion dollar Department of Energy contract, the United States has filed a False Claims Act complaint against Mission Support Alliance LLC (MSA), Lockheed Martin Services Inc. (LMSI), Lockheed Martin Corporation (LMC) and Jorge Francisco Armijo, currently VP of LMC but formerly president of MSA. The complaint alleges that defendant LMSI violated the FCA by submitting false statements about its profits to order to inflate its billing rate. The complaint also alleged that, in violation of the Anti-Kickback Act, defendant LMC paid Armijo and other MSA executives more than $1 million in order to win a $232 million subcontract to clean up the Hanford nuclear waste site in Washington State. DOJ; USAO EDWA

January 24, 2019

Mississippi recovered $26.6 million in settlements with private prison and correctional services contractors including for-profit correctional facilities operators Management and Training Corporation ($5.2 million) and Cornell Companies, Inc., now part of GEO Group ($4.6 million), correctional healthcare provider Wexford Health Sources, Inc. ($4 million); commissary management company Keefe Commissary Network, LLC ($3.1 million), and construction company C. N. W. Construction Company ($3.1 million).  The state's lawsuits against the companies alleged that they used "consultants" as conduits to pay bribes and kickbacks to a commissioner of the Mississippi Department of Corrections, Christopher Epps.  MS

November 30, 2018

As part of an ongoing investigation into price fixing in the international freight forwarding industry, Roberto Dip and Jason Handal, executives in a Louisiana-based freight forwarding company, pleaded guilty to charges arising from a conspiracy between competitors to fix prices for freight forwarding services.   Dip and Handal also agreed to cooperate with the ongoing investigation.  DOJ