Four plead guilty in US government tech procurement fraud case

Four defendants have pleaded guilty in a US government IT procurement fraud case, which prosecutors claim has cost taxpayers at least $1.3 million in losses.

In the District of Maryland, a government official and an IT contractor were among those who admitted to charges relating to their roles in bid-rigging schemes. These involved bribery connected with the sale of IT products and services to the federal government, including the Department of Defense (DoD).

In November last year, government tech contractor Brandon Scott Glisson and federal official Lawrence Eady [PDF] pleaded guilty to separate counts of bribery. Prosecutors said Glisson bribed Eady with $630,000 from his company, Alpha Greatness Omega (AGO) in exchange for a promise that the US government would purchase IT products from one of their co-conspirators' companies at artificially inflated, non-competitive prices. According to the US Justice department, the scheme ran between August 2019 and October 2020. The inflated chunk of the price was then paid to AGO, which Glisson used for personal luxury purchases and to fund the bribes, prosecutors said.

Among the first guilty pleas in the Justice Department's ongoing investigation into IT manufacturers, distributors and resellers selling to US government included that of Antwann Rawls, an on-site government IT consultant, and Scott Reefe, an IT sales executive.

Earlier this month, Reefe pleaded guilty to conspiracy to defraud the United States and conspiracy to commit wire fraud, while Rawls pleaded guilty to conspiracy to defraud the United States.

Prosecutors allege that between 2018 and May 2019 (at a minimum), Rawls, Reefe, and others involved attained confidential procurement information, including procurement budgets for large US government IT contracts. They then used inside information to rig bids for government IT contracts at artificially determined, non-competitive and non-independent prices, ensuring one of their co-conspirators’ companies would win the contracts, the complaint alleges. Government estimates suggest that the cost to the US public purse was at least $1,300,000 in losses.

In a statement, acting assistant attorney general Doha Mekki of the Justice Department’s Antitrust Division said: "These convictions bring to justice individuals who cheated and defrauded the United States government for their own personal gain. Holding these individuals accountable shows that rigging bids for government contracts will not go unnoticed or unpunished."

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Christopher Dillard, the special agent in charge of a DoD Defense Criminal Investigative Service, said the "outcome demonstrates our commitment to aggressively investigate those who enrich themselves with federal procurement dollars while cheating taxpayers. DCIS is proud to work with our law enforcement partners to protect the integrity of the procurement process, including when it impacts the intelligence community."

Sentencing hearings are due to be set at a later date. Those pleading guilty face anything between five and 20 years in prison.

In October last year, six individuals were indicted in charges relating to procurement fraud. As well as those now pleading guilty, Victor Marquez, owner of two IT companies with significant government contracts, and Breal Madison Jr, a fellow Maryland resident, were also indicted.

The allegations against Madison suggest the US government could have been defrauded of $7 million in connection with the sale of IT products to various government agencies. ®