Trade Agreements Archives - Constantine Cannon

November 18, 2019

Daniel Norton, the owner of former DOD contractor Emerson Company, has been sentenced to 8 years in prison following his guilty plea on charges that he fraudulently obtained government contracts and obstructed justice. According to the evidence at trial, Emerson Company had been debarred in 2011, but Norton used front companies to fraudulently secure purchase orders for parts to be supplied to the military. In violation of contract Buy-American requirements, Norton filled the purchase orders by supplying non-conforming products manufactured in China, even where the contract called for a specific part from an American manufacturer. In addition to his prison sentence, Norton was ordered to pay $2.4 million in restitution, and forfeit property valued at over $1 million. USAO SD OH

Tagged in: Criminal Proceedings, Defense Contract Fraud, Government Procurement Fraud, Trade Agreements,

June 20, 2019

Pennsylvania-based Support of Microcomputers Associates (SOMA) has agreed to a $300,000 judgment for violating the False Claims Act and Trade Agreements Act. The Trade Agreements Act prohibits the sale of computer supplies manufactured in certain countries to some federal agencies, such as the Department of Defense. However, according to a former SOMA executive’s lawsuit, the company allegedly sold federal agencies computer supplies made in China, Vietnam, and other non-compliant countries. USAO EDPA

Tagged in: FCA Federal, Government Procurement Fraud, Trade Agreements, Whistleblower Case, Whistleblower Rewards,

May 13, 2019

Silicon Valley-based software company Informatica LLC will pay $21.57 million to resolve allegations that it provided false information about its commercial pricing and discounting practices that was then used in negotiations for Multiple Award Schedule contracts with the General Services Administration. In addition, Informatica was alleged to have caused sales to the U.S. in violation of the Trade Agreements Act. The whistleblower, a former employee of Informatica, will receive $4.3 million from the settlement. DOJ

Tagged in: FCA Federal, Government Procurement Fraud, Pricing Fraud, Trade Agreements, Whistleblower Case, Whistleblower Rewards,

Fraud in GSA Contracts: How to Report it Under the False Claims Act for a Whistleblower Reward

Posted 05/13/19

Entrance to General Services Administration building, with carved eagle over door

Federal government offices purchase all the products and services any office does: office supplies, telecommunications equipment and services, computer hardware and software, consulting services, vehicles, travel services, and so on. The General Services Administration is the centralized procurement arm for the federal government, overseeing tens of billions of dollars in procurement annually, as well as handling...

Tagged in: FCA Federal, FCA State, Government Procurement Fraud, Pricing Fraud, Set-Asides and Preferences, Trade Agreements,

Catch of the Week — DOJ Settles False Claims Act Case Against Cybersecurity Company

Posted 04/18/19

Last week, the Department of Justice announced that Fortinet, Inc., a Silicon Valley-based cybersecurity company, has agreed to pay more than half a million dollars to resolve allegations that it lied about its compliance with the federal Trade Agreements Act (TAA). The allegations were brought to the government’s attention through a False Claims Act lawsuit filed by a whistleblower who worked in Fortinet’s...

Tagged in: Catch of the Week, Cybersecurity and Data Breaches, Defense Contract Fraud, FCA Federal, Trade Agreements, Whistleblower Case,

November 13, 2018

Naum Morgovsky and Irina Morgovsky were sentenced following their guilty pleas for conspiracy to illegally export components for the production of night-vision and thermal devices to Russia in violation of the Arms Export Control Act, and for laundering the proceeds of the scheme. The defendants purchased products using their U.S. business, Hitek International, representing that the products would not be exported. The couple then shipped the products to Moscow-based Infratech using a variety of front companies and shipping methods. They were sentenced to 108 months and 18 months, respectively, were assessed a $1 million fine, and forfeited $223 thousand. DOJ

Tagged in: Criminal Proceedings, Trade Agreements,

September 6, 2018

The owner of New Jersey-based defense contracting firm, Bright Machinery Manufacturing Group Inc (BMM), has been charged with defrauding the Department of Defense and violating the Arms Export Control Act. From 2010 to 2015, Ferdi Gul—currently at large in Turkey—submitted bids and was awarded 346 contracts worth $7 million to manufacture military parts within the U.S., including torpedoes, firearms, and mine clearance systems. Instead, Gul had the parts made in Turkey, submitted false quality control paperwork, and sent the parts back to the U.S. to DoD customers. In subsequent testing by the DoD, some of the parts were shown to be essentially unusable. If found and convicted, Gul could be imprisoned for a maximum of 160 years and be ordered to pay up to $3.5 million. USAO NJ

Tagged in: Defense Contract Fraud, Government Procurement Fraud, Trade Agreements,

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.

Tagged in: Defense Contract Fraud, Government Procurement Fraud, Trade Agreements,

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 EDPA

Tagged in: Defense Contract Fraud, Falsifying Invoices, FCA Federal, Government Procurement Fraud, Trade Agreements,

October 27, 2017

JGB Enterprises, Inc. agreed to pay $150,460 to settle charges it violated the False Claims Act by billing the Army for repair kits for the Army’s tank recovery vehicle which included parts from unapproved sources. DOJ (NDNY)

Tagged in: Contract Non-Compliance, Defense Contract Fraud, FCA Federal, Trade Agreements,

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