Texas Executive Pleads Guilty to Bid-Rigging for U.S. Air Force Healthcare Projects

By the Constantine Cannon Whistleblower Team

On March 18, the Justice Department’s Antitrust Division announced that Texas-based businessman, Eric J. Caddy, pleaded guilty to two felony counts for conspiring to rig bids and defraud the U.S. Department of War. The charges stem from contracts to supply shelving and storage products to the U.S. Air Force for healthcare facilities.[1]

Which Projects Did Defendants Target with Collusive Bids?

Caddy and his co-conspirators allegedly submitted collusive bids for multiple healthcare-related projects at Air Force Base Moody in Valdosta, Georgia including the following:

(1) the Medical Logistics Warehouse Project; (2) the Pharmacy Modernization and Renovation Project; (3) the Veterinary Clinic Project; and (4) the Dental Lab Clinic Project.[2]

Prosecutors allege that one co-conspirator directed Caddy to submit inflated prices for certain projects and even provided the exact figures to include in the bids. Caddy then allegedly submitted those bids to a prime government contractor, which forwarded them to the government.

To conceal the scheme, Caddy allegedly re-wrote some bid documents in his own handwriting before submitting them. The projects, amounting to over $1.6 million, were funded through the Defense Logistics Agency’s Facilities Maintenance, Repair, and Operations Program.

This plea is the first charge in an ongoing investigation into bid rigging and fraud affecting U.S. military facilities in the United States.[3]

Comments on the Case

Acting Deputy Assistant Attorney General Daniel Glad of the Justice Department’s Antitrust Division commented: “Defending free and fair competition in healthcare spending is a critical priority for the Antitrust Division, particularly when it affects the U.S. military. The Antitrust Division’s Procurement Collusion Strike Force and its partners will continue to find and prosecute those who corrupt the competitive process and increase healthcare-related costs in the United States.” [4]

Constantine Cannon partner Marlene Koury stated: “Bid rigging in government contracting harms competition and inflates costs, ultimately at the expense of U.S. taxpayers. This case makes clear that no contract is too small and no scheme too clever to escape detection. We encourage antitrust whistleblowers to speak up with any information regarding anticompetitive conduct that harms the government.”

What is the DOJ’s Antitrust Whistleblower Rewards Program?

While it is unknown whether whistleblowers were involved in bringing this case, the government counts on individuals to come forward with original information about various types of misconduct.

The DOJ’s Antitrust Whistleblower Rewards Program offers financial rewards of up to 30% of the criminal fine or recovery to eligible whistleblowers who report information about antitrust violations such as bid-rigging, price-fixing, and market allocation schemes. To learn more about the program and our analyses of the DOJ’s first award under the program, review our previous posts here and here.

Our Firm Represents Antitrust Whistleblowers

Constantine Cannon has extensive experience representing antitrust whistleblowers under the DOJ’s Antitrust Whistleblower Rewards Program and the False Claims Act. Our firm was responsible for securing the largest antitrust False Claims Act recovery, among our other successes.

Our firm is also one of the country’s leading antitrust law firms, responsible for two of the largest antitrust settlements ever. Constantine Cannon’s representations have led to over $1 billion in government and whistleblower recoveries, and an additional $5 billion for our firm’s other clients.

Please contact us if you believe you have a case. We will connect you with a member of the Constantine Cannon whistleblower team for a free and confidential consultation.

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Sources:

[1] See https://www.justice.gov/opa/pr/texas-man-pleads-guilty-rigging-bids-healthcare-related-us-air-force-projects

[2] Id.

[3] Id.

[4] Id.