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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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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

August 20, 2019

American Airlines, Inc. will pay $22.1 million to resolve claims that it falsely reported contract performance times in a contract between the airline and the United States Postal Service.  The contract required American Airlines to take possession of U.S. mail receptacles at domestic locations as well as international locations of the Department of Defense and State Department, and report the time the receptacles were delivered at specified locations by submitting an electronic scan.  American Airlines was alleged to have falsified delivery information, thereby concealing contractual non-compliance and avoiding penalties for late delivery.  DOJ

August 19, 2019

The Sesolinc Group has agreed to pay $2.4 million to settle a whistleblower case alleging violations of the False Claims Act in substandard products sold to the Army, the Department of Veterans Affairs, and General Services Administration.  Despite concerns raised internally by whistleblower Charles Johnson, Sesolinc allegedly continued to sell and deliver these products to government agencies.  As part of the settlement, it will also repair products that were previously sold and delivered.  USAO SDGA

August 16, 2019

Sunrise Systems of Brevard, Inc. will pay $500,000 to resolve charges that in a contract to perform demolition work for NASA, Sunrise claimed that it would partner with V&R Enterprises, making Sunrise eligible to receive Small Business Administration funding.  In fact, Sunrise performed nearly all of the work, violating SBA labor and work requirements.   USAO MD FL

August 15, 2019

ManTech Advanced Systems International, Inc., a subcontractor on a project with the Environmental Protection Agency, will pay $750,000 to resolve allegations that a project manager required to have top secret clearance had his clearance revoked during the term of the contract.  In addition, when the contract was extended, ManTech again represented that the project manager had top secret clearance.  Despite the revoked clearance, ManTech billed the EPA over $325,000 for the individual's services.  USAO ED VA.
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