Government Contractor Fraud Civil or Criminal

Without Experience with Procurement Regulations and Federal Procurement Law, Your Criminal Case Could be in Jeopardy. As Federal Government Contractor Fraud Lawyers, We Work With Local Criminal Defense Attorneys in All States to Gain an Advantage in Complex and Tricky Procurement Laws that Federal Prosecutors Bet on Your Attorneys Not Understanding. 

government contractor defense and government contracting fraud attorneyTheodore P Watson. Government Contractor Fraud Lawyer. When an agency suspects a company of government procurement fraud, there is a myriad of actions that immediately occur. If the contracting officer is involved, he or she will report the situation to the respective agency IG office or relevant government OIG investigation department.

When notified that they are part of a criminal investigation involving contractor procurement fraud, companies often seek to retain a traditional criminal defense attorney. However, without the requisite experience and knowledge about the nuances and sub-elements of the government’s case, the contractor is essentially left at a disadvantage and in a precarious position unless his criminal attorney is also well-versed in federal procurement laws.

For example, government small business and SBA procurement regulations are extremely confusing, and the relevant FAR regulations are just as complex. Nevertheless, these are the very same ingredients and core of the government’s underlying case. Hiring a government contractor fraud – criminal or civil lawyer to fight your case would require that person to understand common legal issues such as limitations on subcontracting, pass-through contracting matters, Buy American Act requirements, business control and affiliation etc.

As a government contractor, you may not be immediately aware of the situation until a federal investigator starts knocking on your door or you receive a subpoena telling you to provide certain documents. This process is important to a government contractor because the documents you provide to the criminal investigator will also be the basis for building a case for contractor procurement wire fraud, False Claims Act criminal and civil charges. How you respond is extremely critical. Corporate executives should immediately seek legal advice from top government criminal contractor fraud lawyers and defense contractor attorneys that also have experience with the criminal process.

What is Procurement Fraud?

Procurement fraud is the unlawful use of the procurement process to get federal government contracts, goods or services or to obtain an unfair advantage during the entire procurement process. Contractors use a variety of schemes in hope that the government does not notice. There are also companies that make honest mistakes because they were not aware of a particular regulation. Nevertheless, penalties for procurement fraud are very daunting and costly.

Examples of Defense Contractor Government Procurement Fraud Schemes

Allegations in a federal criminal or civil case involving government contracting can develop for various reasons including price-fixing and bid-rigging; submitting fraudulent pay invoices; progress payment fraud; allegations that a defense contractor gave false information about its product specifications; mischarging the government for the cost of services or supplies. 

Following are some common procurement fraud schemes that federal law enforcement agencies frequently investigate.

Conflict of interest: This procurement fraud scheme occurs when a government employee may have sensitive bidding information and uses it for personal gain or is in a decision-making position for the award of a government contract. DOJ and OIG look for indicators such as changes and resistance to switching contractors and raising prices.

Kickbacks: This occurs when government contractors pay kickbacks to government employees who facilitate the payment of false or fraudulent invoices. Indicators of this procurement fraud scheme include when a particular contractor consistently wins federal contracts; invoices lack appropriate supporting documentation, and the procurement employee builds a close relationship with the contractor.

Bid rigging: This procurement fraud scheme occurs when vendors coordinate their bids to eliminate competition, thus increasing the price, including Bid rotation — contractors conspire to take turns submitting the lowest bid, and collusion when insider information is used to prepare a winning bid.

Other government contract criminal investigations can occur for small business fraud under the SBA 8(a) BD Program. This has become very common in recent years. Violation of SBA regulations can lead to a series of criminal and civil convictions that include affiliation, limitation on subcontracting regulations, and conspiracy to commit fraud against the federal government.

Once the government has sufficient evidence, there will more than likely be a criminal indictment for charges of conspiracy, wire fraud penalties, mail fraud, and other violations that can lead to imprisonment and hefty fines and penalties.

Statutes Used Against Government Contractors for Making False Statements to the Government

Federal prosecutors, whether from an OIG or DOJ investigative office use a series of federal statutes, to combat contractor fraud civil or criminal, to indict and ultimately convict small businesses and large DOD defense contractors. Each false statement made to the government, even during a government investigation, can be used against the contractor. Making false statements to the government is where government fraud cases develop. This is where having a government contractor fraud criminal attorney can help.

18 USC 1001 – U.S. Code – Crimes and Criminal Procedure § 1001. Making False Statements to the Government

18 USC 1001 punishes individuals and government contractors for making false statements to the federal government. Without a well-versed government contractor defense attorney on your team, the charge can lead to an indictment or even a criminal conviction. Hence, fines and imprisonment.

USC 1001 prohibits (1) falsifying, concealing, or covering up by trick, scheme, or device a material fact; (2) making any materially false, fictitious, or fraudulent statement; or (3) making or using any false writing or document knowing that it contains any materially false, fictitious, or fraudulent statement. Other federal charges that could be brought in conjunction with charges under this section include mail and wire fraud charges.

Federal Government Contractor Fraud Attorneys for The False Claims Act

 Civil or criminal: The Federal False Claims Act (FCA) prohibits you or your company from knowingly presenting false claims to the federal government for the purpose of payment or even causing such claims to be presented. The FCA also purohits you from knowingly making certifications and false records or materially false statements in regards to invoices, applications, bids for contractors, or any application where you may get a benefit.

False Claims Act Penalties: Penalties under the False Claims Act arise for a variety of reasons.  They include false and misleading statements to the federal government, violations of the Anti-Kickback Statute, submitting false payment invoices; violation of the Federal False Claims Act by knowingly conspiring with and causing another small business to submit false claims for payment to the government for payment of federal small business contracts that were fraudulently obtained. Find out more from a government contractor fraud lawyer.

False Claims Act criminal and civil penalties also apply to subcontractors. When civil or criminal investigation starts, subcontractor liability under the Act applies. As a result, companies should also immediately seek help from government procurement fraud attorneys that understand the criminal process and that can adequately protect their legal rights when responding to federal subpoenas or cooperating with federal investigators. See also information on SDVOSB fraud.

Figures: the minimum per-claim penalty will increase from $10,781 to $10,957 (an increase from $5,500 to $10,781). The maximum per-claim penalty increased to $21,916 (yet another increase from $11,000 to $21,563). The False Claims Act penalties will be adjusted each year to reflect changes in the inflation rate, required to be done no later than 15 January of every year.

Looking to Minimize the Impact of a False Claims Act Charge Against You?

Many of the underlying civil and criminal charges brought against government contractors stem from another action. For example, if the government claims that you violated the federal small business program rules ( HUBZone, 8(a) or SDVOSB) then each invoice submitted or contract your won could be viewed as a false claim. As contractor defense attorneys, our goal will b to first weaken the underlying allegation and the evidence that the government wants to use against you. Not all allegations by the government are valid. However, without contractor fraud lawyers that really understand the federal procurement system, your chances of avoiding criminal fines, jail time or civil fines are significantly increased.

Are You Facing a Buy American Act Fraud  Civil or Criminal Case?

The Buy American Act requires Federal agencies to procure domestic materials and products. Two conditions must be present for the Buy American Act to apply: (1) the procurement must be intended for public use within the United States; and (2) the items to be procured or the materials from which they are manufactured must be present in the United States in sufficient and reasonably available commercial quantities of satisfactory quality.

The provisions of the act may be waived if the head of the procuring agency determines the Act to be inconsistent with the public interest or if the cost of acquiring the domestic product is unreasonable. If you or your company is in such a difficult situation, contact a Buy American Act fraud defense attorney immediately.

Why You Should Speak to a Defense Government Contractor Fraud Attorney  Before Answering Questions from Federal Law Enforcement Investigators?

If you are a federal contractor that is under investigation by the federal government, speaking to them without your defense contractor fraud criminal defense attorney present can present some dangerous and difficult situations for you in the long run. Usually, when the government’s investigators speak to you, make sure that they have advised you about your right to have an attorney present. Oftentimes, when the government approaches you, it’s because they have a lead or some evidence against you. The more defendants the federal law enforcement agency can get involved, the more of a chance they can get one of them to make statements against the other.

Having a defense contractor fraud criminal lawyer that understands the procurement process and the various small business and contracting issues can be a great benefit to the outcome of your case. Speaking to law enforcement without your contractor fraud defense lawyer present may actually help the government to build a stronger fraud case against you.

Are You Faced With a Criminal Indictment In a Federal Contracting Case? What Happens Next? How Do You Minimize the Impact?

First, when a contractor is indicted in a criminal case does not automatically mean that you are guilty. At trial, federal prosecutors have to essentially start all over again. However, the reality is that a juror could misunderstand and think that if you are indicted that you must be guilty of the charges. Having a procurement fraud defense law firm that understands the process and can explain how the government contracting process really works could turn a juror’s mindset around. A judge giving the jurors instructions may not automatically get rid of the human element.

After the indictment phase, the prosecution and defense lawyers still have to get ready for trial. There may be subpoenas to testify and preparation of evidence to put forth at trial. Despite the indictment, the prosecution starts all over (in theory

What Does the Government Have to Prove in Federal Contracting Fraud Cases? 

The government essentially needs to prove the underlying elements of each crime they charge you or your company with. When the government charges you with a crime or alleges that you violated a statute such as the Buy American Act or False Claims Act, they would typically have to show the contract knowingly misrepresented information to the government as a result of such a misrepresentation cause the company to get government contracts, be paid for faulty equipment or incorrect invoice.

Government contract fraud not only means deception or submitting false information, it can also mean that you materially omitted information that was material or critical to the outcome. If the government relies on false information, then the government’s burden of proof becomes easier. In any event, having a team that understands both government contracting regulations and procurement law can increase your chances of forming a defense against fraud.

Tips for Hiring a Government Contractor Fraud Defense Attorney

Many defense contractors and corporate entities immediately seek to retain a traditional criminal defense attorney when an investigation for government procurement fraud is launched. However, corporate executives and contractors quickly find out the lawyer is not well versed in the nuances involved in federal procurement law. For example, when small business contractors face criminal liability for fraud in the SBA 8(a) Business Development Program or FAR limitations on subcontracting regulations, there are specific legal definitions that do not apply in the traditional commercial sector. As a result, many sophisticated contractors hire a team that includes experienced government contractor fraud lawyers.

  • Your defense team should include local criminal defense counsel and a government contractor lawyer that understands the procurement procurements process.
  • One without the other is what increases the chances of criminal indictments and conviction rates.

The company may typically retain a government contractor fraud attorney who is often a traditional criminal defense attorney and will more than likely have no experience or understanding of federal procurement law. This leaves the corporation at a substantial disadvantage. Therefore, retaining legal counsel and federal criminal defense attorneys that understand government contract law and criminal defense, serves the company well and can even reduce the cost of litigation.

 Get Help from Top Federal Government Contractor Fraud Criminal Defense Lawyers

If you are facing civil or criminal charges of federal defense contractor fraud, find and speak to an experienced federal government contractor fraud lawyer that understands government contract law, False Claims Act penalties and liability and who can aggressively defend your legal and constitutional rights

Call Watson & Associates small business lawyers and speak to our government contractor fraud attorneys for immediate help. 1-866-601-5518. FREE INITIAL CONSULTATION.