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:
June 27, 2018
John J. Palie Jr. and his son John J. Palie III both pled guilty to fraud charges related to titanium sold to a Connecticut defense contractor. The two admitted to misrepresenting the source and quality of the titanium they sold to a company that produces aircraft engines including for U.S. Air Force fighter jets. The victim company faced $1,328,000 in losses for the fraudulent misrepresentation. USAO DCTJune 26, 2018
Alter Stesel, also known by various alias, and his company A1 4 Electronics Inc. were placed in debarment status by the Department of Homeland Security (“DHS”) for providing counterfeit goods and failing to perform on contracts with DHS. Stesel then continually created new companies to falsely certify that to the government that he was not under debarment status and received approximately 45 contracts with his two new companies worth over $300,000 while on debarment. Stesel pleaded guilty to six counts of wire fraud. USAO EDVAThe Big Business of Detaining Families Creates a Serious Fraud Risk
Posted 06/21/18
By Poppy Alexander
The massive public outcry about family separations at the border has spotlighted an area of federal spending that often gets ignored-the massive business that is immigration detention for children and families. The Office of Refugee Resettlement, a division of HHS, spent approximately $3.4 billion on private companies to shelter and detain these kids in just the last four years. Yet little data...
June 8, 2018
New Jersey couple Babu Metgud and Shubhada Kalyani, who operated defense contractor Shubhada Industries, were ordered to pay more than $232,000 for overcharging the Defense Logistics Agency for, and failing to disclose the origin of, munition vehicle light assemblies it had acquired from third parties and marked up by 5,400%. The case was decided on the government’s summary judgement motion. USAO EDPAJune 7, 2018
A prime contractor joint venture between AECOM, Bechtel, and CH2M Hill, Washington Closure Hanford, LLC, performing environmental clean-up at the Department of Energy's Hanford Site, has agreed to pay $3.2 million to settle a case first brought by whistleblowers under the False Claims Act. The case alleged that defendant awarded subcontracts reserved for small disadvantaged business to a company that purported to be eligible for such contracts but was in fact a pass-through front company for a larger entity. The whistleblowers will receive $643,000 as a result of the settlement. ED WAJune 1, 2018
Richmond, Virginia-based James River Air Conditioning Company agreed to pay $625,000 to settle allegations that it violated prevailing wage requirements, underpaid workers, and submitted false payroll reports to the government related to plumbing, heating, and HVAC work the company performed under seven federal renovation and construction project contracts. The case was originally filed as a whistleblower complaint under the False Claims Act by Nathan Kirchgessner, who will receive $106,250 from the settlement. USAO EDVAMay 29, 2018
UK-headquartered marine services contractor Inchcape will pay $20 million to resolve allegations the company and its subsidiaries defrauded the U.S. Navy by submitted exaggerated invoices, double-billing, and billing at rates in excess of agreed-upon rates under contracts for ship "husbanding" services, including ship-to-shore and local transportation, force protection services, food provision, and waste removal. The case was originally filed under the False Claims Act by former employees of Inchcape, Noah Rudolph, Andrea Ford, and Lawrence Cosgriff, who will receive approximately $4.4 million of the settlement. USAO DDCMay 9, 2018
The SEC announced it charged a registered municipal advisor and its owner with defrauding a south Texas school district in connection with multiple municipal bond offerings. The SEC’s order instituting proceedings found that in connection with three municipal bond offerings between January 2013 and December 2014, Mario Hinojosa and his wholly-owned municipal advisor, Barcelona Strategies LLC, misrepresented their municipal advisory experience and failed to disclose conflicts of interests to their client, a local school district in South Texas. While working as a paralegal, Hinojosa set up Barcelona, registered it as an SEC municipal advisor, drafted a marketing brochure about the firm, and circulated the brochure to the school district and other municipalities. The brochure created the misleading impression that Hinojosa and Barcelona had served as a municipal advisor on numerous municipal bond issuances and failed to disclose that Hinojosa had a financial interest in the school district’s offerings. By virtue of their misrepresentations and omissions, Barcelona and Hinojosa improperly earned hundreds of thousands of dollars in municipal advisory fees. The SEC’s order found that Hinojosa and Barcelona engaged in fraudulent, deceptive, or manipulative acts and breached their fiduciary duties to municipal clients. Without admitting or denying the allegations, Barcelona and Hinojosa consented to a cease-and-desist order and are jointly and severally liable for paying $362,606 in disgorgement and $19,514 in prejudgment interest. Barcelona was also assessed a civil penalty of $160,000 while Hinojosa was assessed a civil penalty of $20,000. Finally, Hinojosa was barred from association with various regulated entities, including municipal advisors. SECDOJ Announces $20 Million Settlement with Inchcape Shipping Services
Posted 05/30/18
Yesterday, the Department of Justice announced a $20 million settlement with Inchcape Shipping Services Holdings Limited and several of its subsidiaries to resolve allegations that Inchcape overcharged for services provided to the Navy for nearly a decade. The case was filed in 2010 by three former Inchcape employees under the qui tam provisions of the False Claims Act. As a result of the settlement, the...