Friday, June 30, 2017

$15 Million Fraudulent Billing Scheme

The owner of a defense contractor has pleaded guilty to his role in multiple conspiracies to over bill the Federal government. The over-billing scheme totaled more than $15 million.

This fraud involved a Government contractor named Global Services Corporation (Global) and two shell companies (or straw corporations), Tempo and BPM. According to the Department of Justice, Tempo and BPM submitted hundreds of invoices for work and services that were never performed. Global passed along those fraudulent invoices to the Government and was reimbursed. Global then kept about five percent of the invoice amount and remitted the remaining 95 percent to the two shell companies, Tempo and BPM.h

From 2004 to 2014, these fraudulent invoices totaled more than $15 million in overcharges to the Government.

No word on how the fraud was uncovered but it surprises us that it went undetected for a decade. Where were the contract auditors? Where were the contracting officers? Where were the contracting officer technical representatives? It seems to us like someone should have realized something was not right in the 10 years that this fraud festered.

You can read the full Department of Justice press release here.

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