Government Procurement Fraud Crimes & Aggressive Agency Contract Investigations

Agencies continue to increase oversight with government contract investigations for Government procurement fraud and prosecuting crimes against federal contracting agencies.

A federal government contractor in Alexandria, Virginia was sentenced to 16 months in prison, followed by two years of supervised release, for conspiracy to commit wire fraud and major government fraud. There is a substantial increase in oversight and prosecution of cases where there are joint efforts of the SBA, the Department of Justice, and other partner agencies, to uncover and forcefully prosecute civil fraud committed by those participating in Federal Government contracting programs. Many cases include small businesses that have large businesses and overseas companies involved.

When contractors finally receive word that the company is under federal investigation, there should be some level of urgency within the company. When government attorneys issue a subpoena for documents and information, corporate executives want to make sure that they institute a policy to preserve all emails and correspondence. This means no deleting of emails or shredding of documents.

Government procurement fraud investigations, and how you cooperate with federal investigators can make a huge difference in the final outcome of the case. If the evidence is overwhelming, the federal government opens both a civil and criminal investigation.

• Contractors charged with conspiracy to commit wire fraud can be expected to forfeit personal proceeds from the conspiracy.
• The key to any vindication rests with the contractor defense attorney’s ability to take apart the government allegations of the underlying violation. For example, SBA or VA small business regulations were not violated.

Government agencies such as the Department of Homeland Security (DHS), Office of Inspector General (IG); General Services Administration (GSA), Small Business Administration (SBA) and the Department of Veterans Affairs are aggressive in seeking out criminal activity involving government procurement fraud. Government contractors seeking criminal defense or legal advice regarding small business fraud, general government contract investigations, indictment or litigation of procurement fraud crime cases, must act early in the case. This is true given the vast amount of tools available to federal lawyers. In addition, the early stages of the case often make it difficult to undo critical mistakes at the trial and litigation stages. See additional information about Mail and Wire Fraud Against the Federal Government.

Why are Government Contractors Frequently Indicted and Criminally Convicted?

The reality is that many contractors hire local criminal defense attorneys that have no relevant experience in federal contracting. The US attorneys know this and use it to their advantage when prosecuting a case. Having a government contractor defense attorney that understands the nuts and bolts of the true allegations behind the charges and how to defeat them is very important. Our office gets calls from criminal defense lawyers seeking our expertise in federal procurement. As a result, we see the convictions that now result from a lack of government contracting experience. Companies should avoid this costly mistake.

What is the Best Way to Minimize the Impact of These Aggressive Government Contract Investigations?

The best way to reduce the impact is to seek experienced government procurement fraud legal counsel upfront. The earlier you can get to the bottom of the allegations and push back with real-life defenses and an understanding of the predicate crime, the better your chance of getting your case dismissed or even making the proper settlement. 

General Areas Where Contracts are Vulnerable to Government Procurement Fraud Crimes

 Both large contractors and small businesses are implicated by the drastic laws associated with government contracting. Areas of prime target for criminal activity include: SBA small business government contract fraud crimes– including the SBA 8(a) Program,  SBA HUBZone, Service Disabled Veteran Owned Small Business Programs (SDVOSB fraud) , False Claims Act violations, wire fraud, conspiracy charges, Anti-Kickback violations,  conspiracy to obtain government contracts through fraud and misrepresentation, defective pricing and other areas of defrauding the federal government.

Procurement Fraud Indicators

The following are a few of the common indicators of government procurement fraud crimes and criminal activity.

• Contractor intentionally delays the inception of audit
• Contractor delays in producing requested data or documents
• Contractor documents are all photocopies rather than originals
• Contractor files, reports, data, or invoices are missing
• High turnover of management
• Key personnel have been reassigned or terminated
• The organizational structure is overly complex

How Aggressive Government Contract Investigations Can Impact You?

When the Department of Justice or Office of Inspector General decides to initiate a government contract investigation against your company, it can be crippling in that the energy needed takes away from the normal day-to day productivity. Sometimes, the CEO or other employees will have to submit to interviews during the investigation. Other times, companies have to submit numerous documents as a result of a CID investigative detail. Most important, is that if individuals and companies are not fully aware of their statutory and constitutional rights, a federal investigation can lead to contractors being indicted for procurement fraud very quickly. Sometimes companies and their CEOs, believing that they have nothing to hide or did not break any laws, will sit without counsel and be interviewed by federal agents. This can be a costly mistake. The government attorneys will then aggressively pursue defendants and threaten with criminal liability, jail time and expensive fines. At some point the aggression wears the individual down and can lead to confessions or settlement.

To look at your company operations or for legal representation in a government procurement fraud investigation and federal criminal defense cases, call the federal government contract investigation defense lawyer Theodore  Watson for a FREE confidential consultation. 1-866-601-5518.