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Government Procurement Fraud

This archive displays posts tagged as relevant to fraud in government contracting and procurement. You may also be interested in the following pages:

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October 4, 2019

Zaldy Sabino, formerly a contracting officer with the U.S. State Department, has been convicted of charges related to contracting fraud.  Sabino received hundreds of thousands of dollars in cash from the owner of a construction firm in Turkey that had multiple multi-million dollar contracts with the State Department.  Sentencing is set for February, 2020.  DOJ

September 26, 2019

A military contractor who previously plead guilty to accepting illegal kickbacks and committing wire fraud has been sentenced to over 2 years in prison and ordered to pay $1.4 million in restitution.  Despite being the true owner of Walsh Construction Services, LLC, James Conway concealed his ownership by signing contracts under Keith Walsh, a fictitious name.  He then used Walsh Construction to bill for $1.4 million of work the contractor purportedly performed at Picatinny Arsenal and Joint Base McGuire-Dix-Lakehurst, as well as collect on $180,345 of kickbacks from four subcontractors.  In addition to the prison term and restitution order, Conway was sentenced to three years of supervised release.  USAO NJ

September 13, 2019

Defense contractor GS Engineering, Inc. agreed to pay $1 million to resolve allegations of double-billing federal defense agencies for certain data acquisition equipment. GS Engineering allegedly depreciated the equipment and both charged the government for the cost of the depreciation and leased that same equipment back to the government through a related company. The settlement required GS Engineering to enter into an agreement with the United States Army to hire and maintain a compliance program for government contracting. In addition, its president and four other companies agreed to be excluded from federal contracts for three years. DOJ

September 13, 2019

United Parcel Service will pay $8.4 million to resolve allegations that it overcharged federal agencies purchasing UPS ground delivery services under a General Services Administration Multiple Award Schedule contract by failing to adhere to the contract's Price Reductions Clause.  UPS was alleged to have offered lower prices to other customers without offering those same prices to the U.S., resulting in the government overpaying for package deliveries.  DOJ

September 5, 2019

The owner of two defense contracting firms, Tico Manufacturing Inc. (TICO) and Military and Commercial Spares Inc. (MCS), has been sentenced to 3 years in prison and ordered to pay $8 million in restitution for conspiring to defraud the Department of Defense.  Between 2011 and 2015, Roger Sobrado fraudulently obtained DoD contracts by claiming that conforming parts for critical military equipment, including fighter jets and helicopters, would be supplied through authorized manufacturers.  Instead, Sobrado supplied non-conforming parts through non-authorized manufacturers, recruited family members to commit the same fraud, and collected DoD payments from his family members.  Additionally, he failed to report almost half of his taxable income for three years, causing the United States to lose a total of $509,962.  USAO NJ

September 4, 2019

Defense contractor Arkin Industries has agreed to return $2.6 million in overpayments to the Department of Defense, Air Force, and Navy, after self-disclosing that it had detecting an error in its accounting system that double-billed worker hours.  The designer, tester, and manufacturer of aircraft and helicopter parts cooperated with an independent investigation by the United States, which determined that the overbilling was accidental.  USAO EDNY

September 4, 2019

New Hampshire-based North American Specialty Insurance Company (NASIC) has agreed to pay $1 million to settle allegations of violating the False Claims Act by providing bonding to South Carolina general contractor Claro Company, Inc., despite having actual or constructive notice that Claro was making false and fraudulent statements to claim certification as a small business owned and controlled by socially and economically disadvantaged individuals under the Small Business Administration Section 8(a) Business Development Program.  By turning a blind eye, NASIC enabled Claro Company to continue bidding for set-aside contracts under the 8(a) program.  USAO WDNC

August 29, 2019

International SOS Assistance, Inc. and related entities and individuals have agreed to pay $940,000 to resolve claims that they overbilled TRICARE for air medical evacuation services provided to military service members and their families.  International SOS was alleged to have negotiated discounts from third-party air ambulance services, but failed to pass those discounts on to TRICARE.  The case was brought by a whistleblower who used to be a flight desk manager for International SOS; he will receive an award of $165,000.  USAO EDPA

Catch of the Week — American Airlines Required to Pay Over $22 Million for Falsely Reporting Delivery Times

Posted  08/23/19
Ever wondered why a package you were desperately waiting for showed up late?  Ever wished you could hold those responsible accountable for it? If so, the U.S. government agrees with you.  Its recent settlement against American Airlines required the airline to pay over $22 million for allegedly falsely reporting its delivery times.  The resolution shows that timeliness matters and is yet another reminder that...

August 20, 2019

Luke Hillier, the majority owner and former CEO of defense contractor ADS, Inc., will pay $20 million to resolve claims that he caused the submission of false claims to the government by fraudulently representing that the company qualified as a small business concern eligible for federal contracts reserved for such businesses.  In 2017, ADS and another company officer paid $16 million to resolve claims from the same conduct, bringing the government's total recovery to over $36 million.  The case was initiated by a whistleblower complaint filed by Ameliorate Partners, LLP, which will receive $3.6 million of the Hillier settlement. DOJ
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