Grand Jury Indictments for Federal Contractors

Government contractors facing federal investigations from the Office of Inspector General (OIG), DOJ or some other law enforcement agency should understand the basics of grand jury indictments and how the criminal process can impact the company. When the federal prosecutors finish their investigation, they can bring further charges by moving for a federal grand jury indictment. This is a very stressful process. Small businesses and large contractors should proceed with caution while making sure that they have legal counsel with government contracting experience.

What is an Indictment? 

If you are a federal government contractor facing criminal charges for procurement fraud, you are probably wondering what is an indictment and how it impacts you. The simple explanation is that the federal attorney must present evidence to and show that a crime has been committed and that you or your company has committed the crime.

When there is an indictment it means that the government is formally accusing you of committing a crime or in most cases, committing fraud against the government through government contracting and procurement fraud. The indictment stage does not automatically mean that a contractor is guilty of government contract fraud, performing work in violation of the FAR, or some other criminal liability. Even if you are indicted, the government attorneys still have to prove their case at trial.

When does the Grand Jury Indictment Phase Begin? 

Government contractors or individuals suspected of contractor fraud are often taken through a federal investigation. The DOJ or OIG investigators spend quite a long-time collecting evidence and testimony to see if the government has a strong case. After the prosecutor analyzes the information from investigators, the prosecutor will then decide whether to present the case to a federal grand jury.

If you are indicted, the government lawyers will provide you will formal notice. The Grand Jury indictment notice will provide you with the basic information as to the allegations and charges. Most government contracting companies that are facing a Grand Jury indictment will be facing potential felony charges for committing fraud against the federal government, or conspiracy to commit fraud.

Can a Contractor be Criminally Charged?

Yes, a government contractor can be criminally charged with federal crimes if they are found guilty of fraud or conspiracy to commit fraud. If convicted, federal contractors could face some severe penalties including fines and even prison time. It is important that contractors understand their rights when facing criminal charges or being investigated for potential criminal activity. Additionally, it is essential that they understand the different laws and regulations that govern government contracting in order to ensure compliance. 

The federal government takes contractor fraud very seriously, so it is important for contractors to be aware of how their actions could potentially lead to criminal charges. When considering the question of whether a contractor can be criminally charged, a closer review will show that contractors involved in federal government contracts can be criminally charged. Federal law enforcement agencies frequently indict government contractors and their officers. Although the contractor is technically not a person, the criminal charges can serve to facilitate suspension and debarment actions. The company’s CEO, who is a person, can also be charged and can face hefty fines and even jail time.

The Department of Justice stated that it will hold accountable government contractors that seek to profit unfairly at the expense of U.S. troops and taxpayers when it settled with Agility Public Warehousing Co. KSC (Agility), a Kuwaiti company, that agreed to globally resolve criminal, civil, and administrative cases arising from allegations that it overcharged the US government for performing contracts with the Department of Defense (DOD) to supply food for U.S. troops from 2003 through 2010. If this settlement did not take place, then Agility as a government contractor would be criminally charged and be exposed to the $249 million initially sought by the US government. 

Government Contractor Grand Jury Indictment Process: When government contractors are indicted for committing fraud against the government, the government’s attorney can call witnesses to testify before the Grand Jury, and present evidence in order to get a favorable decision.

The Grand Jury’s job is to decide whether the prosecutor has met his burden of proof to allow the case to move forward with a criminal trial. If so, then you are formally charged. The Grand Jury makes its decision in private. If the government’s lawyers fail to convince the Grand Jury that you have committed a crime then no indictment will result. See What Happens After Government Contractors Receive a Grand Jury Indictment.

Secrecy of Federal Grand Jury Indictments: Only the grand jury members have knowledge about the details and facts leading up to the ultimate indictment or lack of one. Under the United States Constitution, strangers to the defendant will make an unbiased decision whether or not to bring charges against a contractor with a crime.

Federal Contractor Indictments, Grand Juries, and the Constitution

The Fifth Amendment to the U.S. Constitution demands that the federal government obtain an indictment from a federal grand jury in order to prosecute a government contractor or individual for a felony. When contractors receive notice of an indictment, they should not seek to flee from the jurisdiction or hide evidence. Doing so will only just make the results more damaging or incur additional criminal penalties. Although a government contractor may choose to waive their right to a federal grand jury, one should only seriously consider this option with the legal advice of an attorney before doing so.

Hiring a Contractor Defense Fraud Attorney: After the grand jury issues an indictment, the case will then proceed to trial. This is the time that you have constitutional rights to have a criminal defense attorney to represent you. Contractors indicted for contractor fraud against the government should seriously consider retaining legal counsel at this juncture that has experience with government contracting, small business fraud and federal procurement laws.

Statistics have shown that a few criminal defendants that hire public defenders without government contract law experience usually get a terrible result at trial and face jail time. This does not mean that a government contractor defense attorney with federal procurement experience can guarantee a favorable result. It simply means that the chances of getting a favorable result at a criminal trial can be better.

After a company or business owner is charged, they can either hire a private attorney or may choose to be represented by an attorney provided by a public defender. A contractor defense attorney can assist in understanding the law and the facts and risks of the case. Your defense attorney will represent the company as the prosecutor will represent the Government’s interest.

Hire a Government Contractor Fraud Attorney

If you are facing a government investigation for criminal charges involving government contract fraud or False Claims in a government contracting setting, call our contractor fraud defense attorneys at Watson &. Associates, LLC. Call immediately at 1.866.601.5518 for a confidential free consultation.