News

A Utah man pleaded guilty to wire fraud and money laundering in federal court Tuesday afternoon for his role in a fraud scheme he devised to obtain government construction contracts set aside for Service-Disabled Veteran-Owned Businesses.

On February 15, 2018, the former President and Chief Executive Officer of Wellco Enterprises, Inc. (Wellco) and Tactical Holdings Operations, Inc. (Tactical Holdings), Vincent Lee Ferguson, 66, of Knoxville, Tennessee, pleaded guilty to conspiracy to commit wire fraud. Wellco’s former Senior Vice President of Sales, Matthew Lee Ferguson, 41, of Geneva, Illinois, and former Director of Marketing and Communications, Kerry Joseph Ferguson, 36, of Houston, Texas, also pleaded guilty to conspiracy to commit wire fraud.

Timothy A. Garrison, United States Attorney for the Western District of Missouri, announced today that former owners of a local construction company, Patriot Company, Inc., have pleaded guilty in federal court to their roles in a “rent-a-vet” scheme to fraudulently obtain more than $13.8 million in federal contracts.

Jeffrey Harrington and Michael Mayer, owners of several defense contracting firms, were each sentenced in federal court today to 15 months in custody for conspiring to commit wire fraud and file false claims, and to making false statements on their federal income tax returns.

Netcracker Technology Corp. (NTC), a global software company serving the telecommunications industry, has agreed to implement enhanced security protocols for software development, implementation, and its other services to clients, many of whom are part of the United States’s critical communications infrastructure, announced Dana Boente, Acting Assistant Attorney General of the Justice Department’s National Security Division and U.S. Attorney for the Eastern District of Virginia. NTC is headquartered in Waltham, Massachusetts, and is a wholly owned subsidiary of NEC Corp.

Memphis, TN – After two days of the trial before U.S. District Judge John T. Fowlkes, Jr., the defendant M. Cleve Collins entered a plea of guilty to the indictment charging him with one count of major fraud against the United States. D. Michael Dunavant, U.S. Attorney for the Western District of Tennessee, announced the conviction today.

A federal grand jury sitting in Albuquerque, N.M., returned an indictment yesterday charging four men with exploiting the now defunct Big Crow Program Office at Kirtland Air Force Base to perpetuate a multi-million dollar scheme to defraud the United States.

A federal grand jury in the Eastern District of California returned an indictment yesterday against two individuals for allegedly conspiring to defraud the United States, the Department of Justice announced.

WASHINGTON – Nikita Davis, 48, a business owner with a firm in Washington, D.C., was sentenced today to 20 months in prison for a scheme in which she improperly qualified for government contracts and then fraudulently billed the United States more than $1.1 million.

Tampa, Florida – U.S. District Judge Charlene E. Honeywell today sentenced Michael Pirolo (48, Palm Harbor) to four years and two months in federal prison for wire fraud. As part of his sentence, the Court also entered a money judgment in the amount of $594,000, the proceeds of the criminal conduct. Pirolo pleaded guilty on April 10, 2017.

Virginia Beach, Virginia-based contractor ADS Inc. and its subsidiaries have agreed to pay the United States $16 million to settle allegations that they violated the False Claims Act by knowingly conspiring with and causing purported small businesses to submit false claims for payment in connection with fraudulently obtained small business contracts, the Department of Justice announced today. The settlement further resolves allegations that ADS engaged in improper bid rigging relating to certain of the fraudulently obtained contracts.

ALEXANDRIA, Va. – A former senior official with the General Services Administration and her husband were sentenced today to 18 months and 1 year in prison, respectively, for engaging in a nepotism hiring scheme.

A former Captain of the Idaho and Washington National Guard was sentenced today in U.S. District Court in Tacoma to three years in prison, three years of supervised release, and $646,300 in restitution for his lengthy scheme to defraud multiple government programs, announced U.S. Attorney Annette L. Hayes.

Michelle Cho, an officer of Far East Construction Corporation (Far East) and other construction companies, was sentenced today to six months in prison and 24 months of supervised release on a federal charge of conspiring to commit wire fraud. Cho was also ordered to pay forfeiture in the amount of $169,166 and pay a criminal fine in the amount of $35,000.

Tampa, Florida – Acting United States Attorney W. Stephen Muldrow announces that Michael Pirolo (48, Palm Harbor) has pleaded guilty to wire fraud. He faces a maximum penalty of 20 years in federal prison.

ALEXANDRIA, Va. – A former senior official with the General Services Administration and her husband pleaded guilty today to engaging in a nepotism scheme in which they conspired to fraudulently obtain employment from the U.S. government and private federal contractors.

CA Inc. (CA) has agreed to pay $45 million to resolve allegations under the False Claims Act that it made false statements and claims in the negotiation and administration of a General Services Administration (GSA) contract, the Department of Justice announced today. CA is an information technology management software and services company headquartered in New York, New York.

Jeffrey Harrington and Michael Mayer, the owners of several defense contracting firms, pleaded guilty before U.S. Magistrate Judge Karen Crawford this morning to conspiring to commit wire fraud and file false claims, and to making false statements on their federal income tax returns.

The Office of Inspector General (OIG) for the General Services Administration (GSA) issued a report today concluding that GSA’s Office of 18F routinely disregarded and circumvented fundamental security policies and guidelines. The OIG began this evaluation after finding violations of GSA information technology (IT) security policies during the course of a previous review of 18F’s business operations. In May 2016, the OIG issued a management alert report regarding the security violations that prompted this evaluation, and in October 2016, the OIG issued its report on 18F’s business operations.

CHARLESTON, W.Va. – A Texas man, formerly of Charleston, was sentenced today to six months in federal prison for a financial crime, announced United States Attorney Carol Casto. Kevin Mabone, 56, previously pleaded guilty to misappropriating government funds. He was also ordered to pay $6,684.40 in restitution.

KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that the former owner of a local construction company and a Kansas City, Mo., veteran were indicted by a federal grand jury today for their roles in a “rent-a-vet” scheme to fraudulently obtain more than $13.8 million in federal contracts.

St. Louis, MO – ICP Medical, a government contractor based in Earth City, Missouri, has signed a civil settlement agreement and paid $4,000,000 to resolve allegations that it submitted false claims for medical items to the U.S. Department of Veterans Affairs and U.S. Department of Defense.

NEWPORT NEWS, Va. – Roy E. Friend, 52, of Newport News, was sentenced today to 33 months in prison for stealing government property.

CHICAGO — The owner of two recycling businesses was arrested today for allegedly operating a multi-million dollar fraud scheme involving the illegal landfilling or re-selling of potentially hazardous electronic waste.

ALEXANDRIA, Va. – ThunderCat Technology, LLC, located in Reston, has agreed to pay $1 million to settle civil False Claims Act, Anti-Kickback Act, and Procurement Integrity Act claims relating to bid rigging and kickback schemes in connection with six government procurements.

Alexander Robert Xavier, 52, of Boca Raton, Florida, was sentenced to twelve-and-a-half years in prison. Previously, a jury found Xavier guilty of defrauding federal agencies by issuing worthless bonds to insure government construction projects. U.S. District Judge Kenneth A. Marra imposed the sentence and ordered Xavier to pay over $4 million in restitution to the victims of the fraud.

BOSTON – A previously convicted Chelmsford man has been ordered to forfeit more than $6.7 million in connection with his June 2016 conviction for recruiting veterans as figurehead owners of a construction company in order to receive specialized government contracts.

Michelle Cho, an officer of Far East Construction Corporation and other construction companies, pleaded guilty today to a federal charge of conspiring to commit wire fraud. Cho also agreed to pay forfeiture in the amount of $169,166 and pay a criminal fine in the amount of $35,000.

COEUR D’ALENE – William Douglas Brown, 72, of Moscow, Idaho, was sentenced yesterday by Senior U.S. District Judge Edward J. Lodge to two years probation for unlawful possession of firearms and ammunition and making a false statement, U.S. Attorney Wendy J. Olson announced. Brown pleaded guilty in both cases on August 23, 2016.

COEUR D’ALENE – Matt Eugene Ruck, 49, of Moscow, Idaho, was sentenced yesterday in United States District Court to 60 months in prison followed by 3 years supervised release for wire fraud and theft of government money, unlawful possession of firearms and making a false statement, U.S. Attorney Wendy J. Olson announced. Senior U.S. District Judge Edward J. Lodge also ordered Ruck to pay $206,081.35 in restitution. In Ruck’s first case, a jury found him guilty of wire fraud and theft of government money in March of this year. In his second and third cases, Ruck pleaded guilty on August 23, 2016, to unlawful possession of firearms and making a false statement.

Brian J. Garrahan, 42, and Kelly A. Spillman, 35, both of Delray Beach, Florida, were ordered to pay over $4 million for their participation in a conspiracy to defraud federal agencies and federal contractors by issuing fraudulent bonds to insure government contracts.

CHARLESTON, W.Va. – A Texas man, formerly of Charleston, pleaded guilty Monday to a federal financial crime, announced United States Attorney Carol Casto, General Services Administration Inspector General Carol Fortine Ochoa, and Department of Labor, Office of Inspector General, Special Agent-in-Charge of the Philadelphia Regional Office Richard Deer. Kevin Mabone, 56, entered his guilty plea to misappropriating government funds while he was working at the Charleston Job Corps Center.

The U.S. General Services Administration (GSA) Office of Inspector General (OIG) issued a report today concluding that GSA’s 18F organization has experienced a cumulative net loss totaling over $31 million between fiscal year 2014 and the third quarter of fiscal year 2016. This is due to 18F’s inaccurate financial projections, increased staffing levels, and the amount of staff time spent on non-billable activities, all of which have affected cost recovery. The OIG started the evaluation in December 2015 after several senior GSA officials expressed concerns about the management of 18F to the OIG.

Earlier today, the U.S. Attorney’s Office for the Eastern District of New York (the Office) filed fraud charges in Brooklyn federal court against Plaza Construction LLC, successor to Plaza Construction Corp. (Plaza Construction), one of the largest construction firms in New York City. Plaza Construction is charged with mail and wire fraud conspiracy for improperly billing its clients more than $2.2 million over a thirteen-year period for hours not worked and for inserting a hidden surcharge into its bills for the purpose of obtaining payments to offset administrative costs.

GREENEVILLE, Tenn. – On Sept. 13, 2016, a federal grand jury in Greeneville returned an indictment against Vincent Lee Ferguson, 65, of Knoxville, Tenn.; Matthew Lee Ferguson, 40, of Lenoir City, Tenn.; Kerry Joseph Ferguson, 35, of Houston, Texas; Matthew Harrison Martland, 32, of Knoxville, Tenn.; and Stephanie Lynn Kaemmerer, 44, of Knoxville, Tenn., for wire fraud, conspiracy to commit wire fraud, major fraud against the United States, and smuggling goods into the United States.

WASHINGTON – Walter Crummy, a former officer and owner of MCC Construction Company (MCC), pleaded guilty to a federal charge of conspiring to commit wire fraud. Crummy also agreed to pay forfeiture in the amount of $105,618.

SHERMAN, Texas – A 45-year-old Frisco, Texas man has been sentenced to federal prison for disabled veteran related fraud in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Alexander Robert Xavier, 51, of Jensen Beach, Florida, was found guilty on July 14, 2016, of defrauding federal agencies by issuing fraudulent bonds to insure government construction projects.

En Pointe Gov. Inc., En Pointe Technologies Inc., En Pointe Technologies Sales Inc., Dominguez East Holdings LLC and Din Global Corp., all of Gardena, California, have agreed to resolve allegations that they violated the False Claims Act by falsely certifying that En Pointe Gov. Inc. was a small business in order to obtain contracts set aside for small businesses and underreporting sales under a General Services Administration (GSA) contract to avoid the payment of fees, the Department of Justice announced today. Under the settlement agreement, the companies have agreed to pay slightly more than $5.8 million. En Pointe Gov. Inc. is now known as Modern Gov IT Inc.; En Pointe Technologies Sales Inc. is now known as Collab9 Inc.; and En Pointe Technologies Inc. is now known as Dinco Inc.

WASHINGTON – Tarsem Singh, 61, a businessman from Fairfax, Va., was sentenced today to 15 months in prison for conspiring to commit fraud on the United States by illegally obtaining over $6 million in contracts that were meant for small, disadvantaged businesses.

WASHINGTON – Thomas Harper, a former officer and owner of MCC Construction Company (MCC), pled guilty today to conspiring to obstruct justice before the Small Business Administration (SBA). Harper also agreed to pay restitution in the amount of $165,711.

ALEXANDRIA, Va. – Helen Renee Ballard, 51, and Robert S. Ballard, 55, both of Brandywine, Maryland, were indicted by a federal grand jury today on charges of conspiracy, wire fraud, aggravated identity theft, and false statements for their roles in a scheme to fraudulently obtain employment from the U.S. government and federal contractors for family members.

The Department of Justice announced today that Deloitte Consulting LLP (Deloitte) has agreed to pay $11.38 million to resolve allegations under the False Claims Act that it submitted false claims under a General Services Administration (GSA) contract.

Moustafa Ahmed Ibrahim, 37, of Harrisonburg, Virginia pleaded guilty today to paying bribes to public officials in order to obtain government contracts for his company.

General Services Administration Office of Inspector General special agents from Boston, Massachusetts, recovered the Works Progress Administration oil painting, "Old Ironsides, USS Constitution," by Vadim Vladimirovich Morosoff from Thomaston Place Auction Galleries in Maine yesterday.

Brian J. Garrahan, 42, and Kelly A. Spillman 34, both of Delray Beach, Florida, pled guilty today for their participation in a conspiracy to defraud over ten federal agencies by issuing fraudulent bonds to insure government contracts.

The U.S. General Services Administration (GSA) Office of Inspector General (OIG) issued two reports today concluding that GSA-managed facilities are at an increased risk of unauthorized access due to GSA’s lack of controls over facility specific building access badges and deficiencies in GSA’s management of Homeland Security Presidential Directive 12 (HSPD-12) Personal Identity Verification (PIV) cards issued to contractors. Unauthorized access to these facilities increases the risk of a security event such as an active shooter, terrorist attack, theft of government property, or exposure of sensitive information.

WASHINGTON – The Justice Department announced today that MCC Construction Company (MCC) has agreed to pay $1,769,294 in criminal penalties and forfeiture for conspiring to commit fraud on the United States by illegally obtaining government contracts that were intended for small, disadvantaged businesses.

SACRAMENTO, Calif. — Eric M. Shaffer, 42, of Modesto, was sentenced today by United States District Judge John A. Mendez to one year and a day in prison for theft of Department of Defense property worth more than $316,000, United States Attorney Benjamin B. Wagner announced.

The Department of Justice announced today that Wisconsin-based Novum Structures LLC (Novum) has agreed to enter a guilty plea and pay $3 million to resolve its criminal and civil liability arising from its improper use of foreign materials on construction projects involving federal funds. This use was in violation of contractual provisions implementing various domestic preference statutes, often referred to colloquially as the “Buy America” requirements. Novum specializes in the design and construction of glass space frames often used in roofs and atrium enclosures.

LOS ANGELES – A man who operated two businesses that sold office supplies to the federal government has been convicted by a federal jury of giving illegal gifts to federal employees who did business with his companies.

Earlier today, the U.S. Attorney’s Office for the Eastern District of New York (“the Office”) filed fraud charges in Brooklyn federal court against Tishman Construction Corporation (“Tishman Construction”), one of the largest construction companies in New York City. Tishman Construction is charged with mail and wire fraud conspiracy for improperly billing its clients more than $5 million over a ten-year period for hours not worked and at rates that were in excess of the agreed upon contract rate.

KANSAS CITY, KAN. - The co-owner of a defunct Missouri construction company has been sentenced to 51 months in federal prison for defrauding a federal program that set aside contracts for businesses owned by service-disabled veterans, U.S. Attorney Barry Grissom said Thursday.

On October 28, 2015, U.S. General Services Administration (GSA) Office of Inspector General (OIG) special agents from New York City recovered a Works Progress Administration (WPA) etching, “Manhattan from Brooklyn” by artist Mortimor Borne, from an antiques store in Hopewell, New Jersey.

Timothy Francis Cashman, a Building Manager for the General Services Administration (“GSA”), was sentenced to 16 months in custody today for accepting bribes and stealing property owned by the United States.

KANSAS CITY, KAN. - A Missouri woman was sentenced Tuesday to 20 months in federal prison for defrauding a federal program that set aside contracts for businesses owned by service-disabled veterans, U.S. Attorney Barry Grissom said. In addition, she was ordered to pay a $30,000 money judgment.

DENVER – Hemal Ramesh Jhaveri, the owner and former CEO of SofTec Solutions Inc. of Englewood, Colorado, was sentenced in federal court in Denver earlier this week to six months in prison. Jhaveri pleaded guilty earlier this year to conspiring to commit the crimes of making false statements to influence the Small Business Administration (SBA) and of filing false federal income tax returns. The conspiracy began in 2006 and continued to 2013.