A federal grand jury in Georgia returned an indictment charging military contractors with an alleged fraud scheme involving government contracts totaling over $7 million, officials stated.
The three-count indictment charges Envistacom LLC, its President Alan Carson and a vice president Valerie Hayes, and the owner of another company, Philip Flores, each with one count of conspiracy to defraud the United States and two counts of major fraud.
“The United States relies upon its contractors to be honest and forthright in their dealings,” said U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia. “When they allegedly provide false information to obtain contracts, they harm the American taxpayer and the integrity of the system. We will diligently work to bring such companies and their executives to justice.”
According to the indictment, from at least September 2014 through at least November 2016, the defendants and others conspired by preparing and procuring purported “competitive quotes” from other companies.
These were sham quotes that were intentionally higher than the proposal prices and/or price quotes from Envistacom and Flores’ company to ensure the sole-source awards.
The conspirators also concealed that the defendants prepared the independent government cost estimates and other procurement documents for the award of these contracts and made false statements, representations, and material omissions to federal government contracting officials regarding these estimates being legitimate independent cost estimates and the sham quotes being “competitive.”
The maximum penalty for conspiracy to defraud the United States is five years in prison and a fine of $250,000.
The maximum penalty for major fraud is 10 years in prison and a fine of $1 million, or, if the gross loss to the government or the gross gain to a defendant is $500,000 or greater, a fine of $5 million.
The defendants are presumed innocent unless proven guilty.
The charges are the result of a federal investigation conducted by the Antitrust Division’s Washington Criminal II Section, the U.S. Attorney’s Office for the Northern District of Georgia, Army CID and DCIS.
Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.