Government Procurement Fraud

September 27, 2021

Oklahoma-based Devon Energy Corporation and its affiliates, Devon Energy Corp. and Devon Energy Production Company, LP (collectively, “Devon”) have agreed to pay $6.15 million to resolve allegations under the False Claims Act.  As a lessee of federal land, the oil and natural gas exploration and production company was required to pay royalties on gas found and produced on that land, as well as put the gas in marketable condition on its own dime.  According to the allegations, however, Devon underreported and underpaid royalties to the Department of the Interior by improperly deducting payments made to third-parties, including payments made to put the gas in marketable condition.  USAO CO

September 10, 2021

Defense contractors Southeastern Equipment Co., Inc. and SECO Parts and Equipment Co. have agreed to pay $900,000 to resolve allegations that they knowingly billed for and provided equipment that was not in compliance with the Buy American Act or the rules of the U.S. Army’s Simplified Nonstandard Acquisition Program.  The government’s investigation was initiated by a the filing of a whistleblower suit under the False Claims Act.  USAO SD Ga

August 26, 2021

Nonprofit organization the Florida Coalition Against Domestic Violence, its former CEO Tiffany Carr, and other former officers and directors, have entered into a settlement agreement with the State of Florida to pay $5 million to resolve civil claims arising from the alleged misuse of state grant funds and excessive compensation to Carr.  The entity will be dissolved.  FL

August 18, 2021

Defense contractor Iris Kim, Inc. (“I-Tek”), together with its owner and four employees, were sentenced on criminal charges arising out of a fraudulent scheme to falsely qualify for Department of Defense and other federal government supply contracts set aside for service-disabled veterans, import Chinese-manufactured goods in violation of the terms of these contracts, and falsely relabel these goods as if they were made in the U.S.  The U.S. spent over $7 million on fraudulently-imported goods sold by I-Tek.  Owner Beyung S. Kim was sentenced to 58 months in prison, and the four employees were sentenced to a combined 93 months in prison.  USAO ED VA

August 3, 2021

In the largest prevailing wage criminal case in the country, one of the largest contractors to complete projects on behalf of the State of Pennsylvania, Glenn O. Hawbaker, Inc., has agreed to pay more than $20 million in wages stolen from over a thousand of its workers.  Between 2003 and 2018, Hawbaker disguised wage theft on an estimated $1.7 billion in state contracts by artificially inflating costs by millions of dollars annually, and by claiming credits for prohibited costs.  PA AG

July 20, 2021

Sage Consulting Group, Inc., and its president and owner Robert Pleghardt, agreed to pay $4.8 million to resolve claims that they paid kickbacks to two business, Wete & Company, Inc. and Index Systems, Inc., which were SBA certified as small businesses owned and operated by socially and economically disadvantaged individuals, to permit Sage to represent that those companies would be performing at least 50% of the work as subcontractors on Sage’s contracts with the Department of Defense Education Activity and Defense Human Resources Activity when, in fact, Sage performed 100% of the work.  USAO EDVA