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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:

Page 26 of 40

August 16, 2018

A New Jersey contractor, Marjan Kasapinov of EMLO Corp, has been arrested for allegedly stealing more than $40,000 in unpaid wages and benefits from workers on a publicly-funded project to remove asbestos at LaGuardia Airport. In addition to withholding wages, Kasapinov allegedly submitted false paperwork to agencies regarding the amounts his employees were paid. He could be prohibited from working on public projects for five years, forced to pay back wages to his employees, and sentenced to up to 4 years in prison if convicted. AG NY

August 8, 2018

The former CEO of Wellco Enterprises, Inc., Vincent Lee Ferguson, was sentenced to 41 months in federal prison for his role in a scheme to sell boots to the Department of the Defense and others as "Made in the U.S.A.," when the boots were, in fact, made in China.  The company instructed its Chinese manufacturing facility to include tear-away "Made in China" labels on the boot uppers, and then instructed employees at Wellco's New Jersey facility to remove the labels.  The company sold over $8 million in fraudulently-marked boots.  USAO E.D.Tenn.

August 7, 2018

International Marine and Industrial Applicators, LLC (IMIA) and Marine Equipment Supply, LLC (MES), two marine maintenance companies, have paid $2.8M to settle allegations that they improperly billed the Navy for rental equipment. Under the contract that the companies had with the Navy, they were not allowed to charge for rental equipment. The companies violated this provision when they charged over $1.4M for the rental of hull repair machinery. USAO Western District of Washington

August 6, 2018

Richard Olsen, the CFO of Mission Support Alliance LLC, a Department of Energy contractor, will pay $124,000 to resolve allegations that he received a $40,000 kickback from Lockheed Martin. According to the allegations, Mr. Olsen received the kickback in exchange for a Lockheed Martin subsidiary receiving a lucrative subcontract. Mission Support Alliance is a Lockheed Martin subsidiary as well. USAO Eastern District of Washington

August 3, 2018

A former subcontractor, Andrew Nolan, has pleaded guilty to falsifying quality testing results for the concrete used on the Dulles Metrorail Project. The actual results would have caused the concrete to be rejected in the project, which is partially funded by the Department of Transportation. Nolan is being prosecuted under both the federal False Claims Act and the Virginia Fraud Against Taxpayers Act and faces a maximum of five years in prison. USAO EDVA

July 26, 2018

3M Company has agreed to pay $9.1 million to resolve allegations that it knowingly sold dual-ended Combat Arms Earplugs, Version 2 (CAEv2) to the US military without disclosing defects that hampered the effectiveness of the hearing protection device.  As part of the settlement, the whistleblower who initiated the lawsuit will receive $1,911,000. DOJ

July 26, 2018

Sorensen Gross Construction Company (Sorensen) and its corporate vice president, Khalil Saab, have agreed to pay $2.481 million to resolve allegations that they submitted false claims for payment under a construction contract funded by USAID. Sorensen allegedly subcontracted almost all of the work on a project to build or renovate 16 schools in Aqaba, Jordan to a local Jordanian company, Concorde, in violation of its contract with USAID. DOJ

July 16, 2018

An former airport contractor has plead guilty to paying over $5M in bribes and kickbacks to a field inspector at the Wayne Country Airport Authority in Wayne County, Michigan. According to the government’s allegations, William Pritula, paid the bribes in kickbacks in exchange for favorable treatment for his company, Pritula and Sons, in contracts for pavement repair and fire hydrant installation at Detroit’s airport. The inspector who received the bribes is a co-defendant in the action. USAO Eastern District of Michigan

July 12, 2018

Navnoor Kang, the former head of the New York State Common Retirement Fund, the third-largest pension in the country, was sentenced to 21 months in prison for conspiracy to commit securities fraud and wire fraud.  Kang accepted bribes in return for steering over $2 billion worth of investments to particular firms, generating massive commissions for those who bribed him.  The USAO of SDNY coordinated with the SEC, which brought its own civil enforcement action against Kang.  USAO SDNY

July 6, 2018

North American Power Group Limited, along with its owner Michael Ruffatto, have agreed to pay $14.4 million as a result of allegations that they submitted false claims under an agreement with the DOE to carry out data collection and carbon sequestration projects at a Wyoming energy site.  Rather than seek reimbursement for work done, as they claimed, the defendants had submitted invoices reflecting personal expenses like travel, jewelry, and car payments.  Ruffatto was also sentenced to 18 months in prison for his role in the scheme.  DOJ; USAO WDPA
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