Procurement Fraud & Avoiding Criminal LiabilityWhen it comes to government procurement fraud and legal consequences, companies should realize that the federal government has significantly increased its oversight for large or small businesses who show signs of purchasing fraud. Federal contractors often find themselves exposed to criminal fraud charges from either a whistleblower or some other interested party. In any event, this is not a good situation to be in. Avoiding criminal liability should be a top priority for both large and small businesses involved with federal government contracts.

Government Investigations for Procurement Fraud

The federal government usually commences a procurement fraud investigation way before the contractor knows it. Sometimes a year or more. Contractors targeted in a purchasing fraud investing should immediately seek legal counsel.

Why is this? Because the federal investigation offices tend to have a substantial amount of resources over what the contractor has. Although all potential targets should cooperate with federal investigators, there are also constitutional rights that must be protected. Having a procurement fraud defense attorney on board that understands the process, can be beneficial in protecting your rights.

  • Potential defendants in a criminal procurement fraud case, often wait until charges are brought to retain a defense lawyer.
  • By this time, the government has already developed its case and potential witnesses well in advance. This places a contractor at a great disadvantage.

Consequences of Procurement Fraud

Penalties and other legal consequences for government procurement fraud cause a person to serve jail time or even have to go through a civil trila to fines in the hundreds of thousands or even in the millions.

If you are party to a civil lawsuit, the of proof is a lot lower than in a criminal case. Government attorneys look at the viability of bother types of cases.

The consequences of procurement fraud in a Federal False Claims Act case can cripple your company because both a whistleblower or the government can take shots at your or your company. Having the right legal defense counsel that understands the substantive issues can benefit the overall outcome and even lower any potential consequences through negotiations or trial.

Conspiracy and Collusion Criminal Charges

In federal procurement, most procurement fraud schemes involve some level of conspiracy or collusion. This is the approach that the government typically takes. In addition to wire fraud, many small businesses or large DOD contractors often find themselves under indictment for criminal conspiracy and some level of collusion with federal officials leading to kickbacks and other charges.

A Disadvantage for Small Businesses

Small business government contractors are more exposed to consequences of procurement fraud simply because they do not have experienced staff on board that understands the brutal rules that can implicate the corporation.

In addition, small businesses are also at a disadvantage because they do not have the basic internal policies and controls implemented. Avoiding criminal liability can start with having the basic tools implemented and training internal staff.

When the feds come knocking on the door it is usually too late. Despite the fact that a simple mistake could be made, the common approach is to pursue criminal charges and then use ay credible mitigating circumstances at the end to reduce a criminal sentence.

What are the types of government procurement fraud?

Embezzlement

Stealing money or property by a person who is in a position of trust, such as an employee or an agent. Embezzlers typically come into possession of money or property legally but take it fraudulently. Embezzlement is a white-collar crime and involves no physical violence. Embezzlement charges may be filed for almost any amount, but the amount of money taken usually determines the charge. High-profile embezzlement cases can involve the misappropriation of millions of dollars.

False Claims

Procurement fraud schemes come in various forms. Contractors investigated or indicted for mischarging for cost or labor can be held for violating the False Claims Act. Criminal penalties can also be implemented for knowingly charging customers higher rates or costs than contracted for.

Bid Rigging

Bid rigging in government contracting occurs when there is some form of price fixing when a public contract is somehow promised before the solicitation is published or evaluated. Bid rigging also leads to other criminal procurement fraud charges such as conspiracy or collusion and false claims violations.

To Avoid Costly Mistakes, Get My Free Claims Checklist

If you are an individual or business facing an investigation or criminal charges for federal procurement fraud and looking to avoid criminal liability, call Watson & Associates LLC federal criminal defense lawyers for a FREE Initial Consultation to see how we can minimize the consequences. Call 1-866-601-5518.