Government Contract Fraud Cases
- Government contract fraud broadly refers to the knowing misrepresentation or concealment of a material fact made to the U.S. government or causing such knowing misrepresentation or concealment to occur.
- This fraudulent act is undertaken to induce another to act to their detriment. It can encompass fraudulent misrepresentations, concealments, and omissions.
- The government contracting process is highly detailed and regulated by federal authorities with multiple laws and regulations.
- The Department of Justice (“DOJ”) is frequently involved in protecting the United States from fraud involving the federal government, military branches, defense agencies, etc.
- The DOJ has prosecuted many individuals and companies under federal law—such as the False Claims Act—for engaging in government contract fraud or otherwise defrauding the U.S. government or its federal agencies.
- Consider hiring a team of government contract attorneys who can advise you on the government contracting process.
Experienced Government Contract Defense Team
If you need advice on government contract fraud, do not hesitate to contact our team of defense attorneys.
A charge of government contract fraud involving the U.S. government, federal and defense agencies, or the military can lead to substantial fines and penalties, imprisonment terms, debarment, and reputational damage.
It is critical that you are counselled and represented by a qualified government contract attorney who is experienced in the relevant law and who will ensure that you are afforded your constitutional rights.
At Oberheiden, P.C., our attorneys regularly provide legal representation to individuals and companies who have been charged with government contract fraud or who otherwise need legal advice on the government contracting process.
Do not wait to get in touch with an experienced defense attorney today. Put Oberheiden, P.C. on your side to fight for your reputation and future.
Government Contract Fraud: Introduction
Government contract fraud is a broad offense and can encompass fraudulent misrepresentations, concealments, and omissions.
It refers to the knowing misrepresentation or concealment of a material fact that is made to the U.S. government. It also includes causing such knowing misrepresentation or concealment to occur in order to induce another to act to their detriment.
The government contracting process is highly detailed and regulated. It demands an experienced government contracts attorney who is intricately familiar with the multiple laws and regulations surrounding government contracts.
The stakes are high for government contract fraud allegations. Potential penalties include civil and criminal fines, imprisonment terms, debarment from doing business with the U.S. government, loss of business contacts, and permanent reputational damage.
DOJ Efforts to Combat Government Contract Fraud
The Department of Justice’s Commercial Litigation Branch, Fraud Section investigates and litigates multiples instances of commercial fraud.
The Fraud Section regularly coordinates with U.S. Attorneys, investigative authorities, and private individuals as whistleblowers to uncover billions of dollars in recoveries for elaborate fraud schemes under various federal statutes.
As for government or defense contract fraud, the Department of Justice is frequently involved in protecting the United States from being victimized by fraud involving the federal government, military branches, defense agencies, etc.
One of the most important tools that federal authorities use to weed out government contract fraud is the False Claims Act.
The False Claims Act prohibits knowingly presenting false claims to the government for payment or causing such claims to be presented. It provides for treble damages and both civil and criminal liability.
Under the Act, whistleblowers can bring a Qui Tam lawsuit on behalf of the federal government, which entitles them to sue the company defrauding the U.S. government and recover damages for certain funds recovered by the government.
Recent Government Contract Fraud Cases Investigated by the Justice Department
Below we provide a list of recent DOJ cases pertaining to government contract fraud:
- July 9, 2020 – An American military contractor was charged with perpetrating a theft ring on a U.S. military base in Afghanistan. The indictment alleges conspiracy to defraud the United States and commit theft of U.S. property; theft of U.S. property; and making false official statements. Specifically, the defendant conspired to steal U.S. equipment and military material while working for a government contractor on a U.S. military base in Afghanistan. The defendant identified the items to steal and then negotiated the sale of those items with individuals outside of the military base.
- June 10, 2020 – A government contractor who performs construction work entered into a non-prosecution agreement (“NPA”), agreeing to pay over $1.25 million to resolve the DOJ’s investigation into a kickback and fraud scheme. This scheme was perpetrated by a former manager and involved fraud on the General Services Administration’s (“GSA”) contract to modernize the Harry S. Truman Federal Building in Washington, D.C. The defendant’s cooperation with the investigation and its agreement to pay full restitution contributed to the DOJ’s final resolution of the criminal case.
- June 2, 2020 – An Oklahoma-based contractor and its corporate affiliates have agreed to settled False Claims Act allegations by paying $2.8 million regarding fraudulently obtained small business contracts. Specifically, these charges under the False Claims Act alleged that the defendant improperly obtained federal contracts that were reserved for disadvantaged small businesses. The defendant had obtained these contracts by creating two companies and inducing the government to award small business set-aside contracts to these entities that did not in fact meet eligibility requirements.
- May 27, 2020 – A contractor of Illinois agreed to pay $1 million to settle claims under the False Claims Act for fraudulently misrepresenting its use of a small disadvantaged business to obtain federally-funded construction contracts. The project concerned the construction of a new terminal building at the Peoria International Airport with the use of Federal Aviation Administration (“FAA”) grant funds. The FAA required the use of disadvantaged business enterprises for part of the construction. The defendant made false statements regarding its plans to use a disadvantaged small firm and then falsified documents to make it appear that an eligible business did construction work. However, the work was actually performed by an ineligible company.
- February 10, 2020 – A former government contractor was sentenced to 57 months in prison for procurement fraud regarding his scheme to defraud at least 35 subcontractors across the United States. The defendant’s admissions in his plea revealed that he established and controlled several companies and won at least 105 government contracts to provide goods and services to federal agencies and transport materials to military bases and national parks. The defendant then fraudulently induced subcontractors to perform the required work. However, after he was paid by the government, he did not pay his subcontractors but instead kept the money and spent it in casinos, nightclubs, restaurants, and hotels. The subcontractors were defrauded out of about $3.7 million.
- July 16, 2019 – ITT Cannon agreed to pay the United States $11 million to settle False Claims Act allegations in connection with its supply of electrical connectors to the military that had not been properly tested. ITT sold these connectors to the government and to distributors and other government contractors which incorporated these items into technology and equipment that was also sold to the government. In 2010, after the government learned that ITT had not done testing, ITT promised that it would conduct remedial testing and report the results to the government. In 2011, ITT had several failures in its remedial testing but did not immediately disclose these failures. Instead, it represented that it was behind in its remedial testing. These claims were settled in federal court under the whistleblower or “qui tam” provisions of the False Claims Act.
- March 5, 2019 – The DOJ reached a settlement of its civil forfeiture case of over $25 million against assets owned by defendant that he wrongfully acquired as a government contractor in Afghanistan. The civil settlement of about $25 million is to be forfeited to the United States and is part of a global settlement that involved the resolution of a criminal case and False Claims Act charges. Specifically, the defendant operated several companies which acted as subcontractors that delivered supplies to U.S. service members in Afghanistan. The investigation uncovered thousands of falsified documents that revealed that the U.S. government had paid defendant for work that was never performed and for work that was not described in the documentation submitted—which resulted in overcharging the U.S. government millions of dollars.
- November 14, 2018 – Three South Korean companies agree to plead guilty and pay about $236 million in criminal fines and civil damages in connection with their decade-long scheme to rig bids on U.S. Department of Defense fuel supply contracts to numerous U.S. military bases in South Korea. Regarding the criminal case, it was alleged that from 2005 to 2016, defendants and their co-conspirators participated in a conspiracy to suppress and eliminate competition during the bidding process for the fuel supply contracts. The civil case involved a civil antitrust complaint for the defendants’ anticompetitive conduct that targeted the U.S. military in South Korea.
- November 2, 2018 – Northrop Grumman Systems Corporation (“NGSC”) agreed to pay $27.45 million to settle civil False Claims Act allegations that it overstated the number of hours its employees worked on two battlefield communications contracts with the U.S. Air Force. The Air Force had entered into two contracts with NGSC for battlefield communications service; however, NGSC billed the Air Force for labor hours that were not actually worked. NGSC also entered into a separate agreement with the Criminal Division of the U.S. Attorney’s Office for the Southern District of California under which it agreed to forfeit an additional $4.2 million.
- May 26, 2017 – Agility Public Warehousing Co. KSC (“Agility”) agreed to resolve criminal, civil, and administrative liability regarding allegations that it overcharged the United States when performing contracts with the Department of Defense to supply food for U.S. troops. Specifically, Agility agreed to pay $95 million to resolve civil fraud claims, to forgo administrative claims against the United States that sought $249 million in additional payments, and to plead guilty to the criminal misdemeanor offense for the theft of government funds.
Need Advice Regarding Government Contract Fraud?
Government contracting is a complicated and highly detailed process. It is riddled with a mound of laws and regulations governing the entire process from solicitation, procurement, negotiation, and contract execution.
Charges of government contract fraud can result in multiple consequences such as civil and criminal fines, imprisonment terms, debarment from doing business with the U.S. government, loss of busines contacts, and significant reputational harm.
The complexity of the laws and severity of the consequences for federal violations demand an experienced team of government contract attorneys.
If you need advice on how to proceed in response to an allegation of government contract fraud, give us a call today.
The attorneys at Oberheiden, P.C. have the experience and knowledge needed to advise you on regulatory changes, compliance issues, the entire government contracting process, and the resulting government charges.
We can help you respond to all stages of the investigative process and are also competent to take your case to court and fight for your freedom and reputation.
Call us at 888-680-1745 or contact our office for a free consultation to help resolve these legal challenges.