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10/10/2012 Daily News & Analysis (India) SFIO Raids DDCA Premises

“A three-member team of the Serious Fraud Investigation Office (SFIO) continued its raids on the premises of the Delhi & District Cricket Association (DDCA) on Tuesday….The raids have been conducted after the ministry of corporate affairs (MCA) directed the SFIO to conduct an inspection of records of DDCA under section 201 (A) of the Companies Act, 1956. Azad had lodged a complaint with documentary evidence with the MCA on September 18, making allegations of financial fraud, illegal payments to members of DDCA without clearance from the Registrar of Companies (RoC), rigging of elections, extravagant expenses, illegalities procurement process, misuse of funds and ghost employees.”


10/10/12  LoanSafe.Org  (Northern District of Alabama, USA) Two Former Parsons Company Employees Arrested for Tax Fraud Conspiracy Related to Iraq Reconstruction Efforts

“Two former employees of The Parsons Company, an international engineering and construction firm, were sentenced in federal court in the Northern District of Alabama for their participation in a kickback conspiracy in Iraq and related tax crime for which one executive was sentenced to 15 months and another executive was sentenced to 27 months.  In their plea proceedings, Newell and Hunt admitted taking over $1 million in kickbacks from subcontractors from 2005 to 2007, in return for arranging to award contracts on the munitions clearance program to subcontractors.  Newell and Hunt also admitted filing false federal income tax returns by not disclosing kickback income….

On May 21, 2012, Hunt and Newell’s co-conspirator Ahmed Sarchil Kazzaz, 45, pleaded guilty for his role in the scheme. Kazzaz and his business, Leadstay Company, were indicted in the Northern District of Alabama in September 2011 for paying over $947,000 in kickbacks to Newell and Hunt.  According to the plea agreement, between March 2006 and June 2007, Kazzaz agreed to pay kickbacks to Newell and Hunt totaling 13 percent of the amounts paid by Parsons, and thus obtained over $23 million in subcontracts providing materials and equipment to Parsons. After Kazzaz’s arrest in Los Angeles on Dec. 2, 2011, this case was transferred to the Central District of California, where Kazzaz pleaded guilty.  His sentencing is set for Oct. 29, 2012 before U.S. District Judge R. Gary Klausner in the Central District of California.”


10/8/2012 Sunday World (South Africa) More SABC Vice! Procurement Head Nabbed For Theft

Another classic procurement fraud scheme in South Africa that seems like it might have involved collusion by suppliers facilitated by an allegedly corrupt procurement manager.  Fair Market value of the products sold to the company was less than one third of the allegedly corrupt sales price.


10/5/2012  Examiner.Com (Northern District of Georgia, USA) Former Verizon Wireless Engineer Sentenced on Fraud Scheme

Four year sentence for Former Verizon Wireless Engineer.  Between 1994 and 2010, defendant was employed in Alpharetta, Georgia, as a network engineer at the southeastern regional headquarters of Verizon Wireless and its predecessor.  During that time, Verizon Wireless purchased extended warranty contracts from Cisco Systems Inc., on certain network communications equipment that Verizon Wireless had purchased from Cisco Systems, such as processors and cards. Some of the parts were valued at as much as $40,000 per item. If a part malfunctioned, the warranty contracts required Cisco Systems to service the part or, if necessary, replace it in advance of receiving the malfunctioning part from Verizon Wireless, to avoid potential interruptions in Verizon Wireless’ network. Authorized Verizon Wireless employees could make service requests and order replacement parts through Cisco Systems’ online customer service database.

Beginning at least as early as 2001 and continuing until he was terminated by Verizon Wireless in May 2010, the defendant submitted parts into service in Verizon Wireless’ network, defendant simply took them home and sold them to third-party re-sellers for his own profit. The investigation also revealed that, apart from the Cisco Systems product warranty program, between 2000 and 2009, the defendant fraudulently caused Verizon Wireless to purchase nearly a half-million dollars in expensive network communications equipment from Cisco Systems outright, which the defendant also took home and sold to third-party re-sellers for his own profit.


10/4/2012 Yuma News (Western District of Texas, USA) Army National Guard Soldier Pleads Guilty in Connection with Fraudulent Recruiting Referral Bonus Scheme

“According to court documents, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc., to administer a recruiting program designed to offer monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard. Through this program, a participating soldier could receive up to $2,000 in bonus payments for every person whom the participating soldier referred to join the Army National Guard. Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account. To participate in the program, soldiers were required to create online recruiting assistant accounts.

According to court documents, [the defendant, an Army National Guard soldier…Heller admitted that, between approximately August 2009 and April 2011, she agreed to pay two Army National Guard recruiters for the names and Social Security numbers of at least 28 potential Army National Guard soldiers. Heller further admitted that she used the personal identifying information for these potential soldiers to claim that she was responsible for referring these potential soldiers to join the Army National Guard, when in fact she had not referred them.

As a result of these fraudulent representations, Heller collected at least approximately $44,500 in fraudulent recruiting bonus payments, approximately $21,000 of which she gave to the two Army National Guard recruiters who facilitated the fraudulent scheme.”


10/2/2012 Boston Globe  (Suffolk County,  Massachusetts, USA) Motion to Dismiss Tim Cahill Case Denied

Alleged scheme involved a former state treasurer who authorized $1.8 million in budgeted advertising to promote the state lottery that prosecutors allege benefitted his campaign for governor.



10/1/2012 Spend Matters: UK/Europe  (London, United Kingdom) Lloyds Procurement / Invoicing fraud – manager sent down for 5 years

The following article features a UK Procurement Fraud case that is notable for the five year sentence the former female Lloyds TSB senior manager received by a UK court, but also for her creative variation on a common fraud scheme.  So as to not raise suspicion, the defendant opened and controlled a bank account in the name of a real supplier and paid $2.5 million based on phony invoices submitted.


9/30/2012  Washington Post  (Washington D.C., USA) Suspensions, debarments jump 73 percent in federal contracting in 2011


“Some 3,326 federal contractors were suspended or debarred last year, a 73 percent increase from 1,918 contractors sanctioned in 2009.…The ability to debar or ban a certain company from doing business with the U.S. government is an important tool we have to protect taxpayer dollars from waste, fraud and abuse,’’ Joe Jordan, administrator of the White House Office of Federal Procurement Policy, said in a Sept. 18 blog post introducing a report on contractor oversight by the Interagency Suspension and Debarment Committee.  While the Obama administration takes credit for greater vigilance, the rise in bans may also reflect the government’s increased reliance on outside vendors.”


9/13/2012 Imperial Valley News (Washington D.C.  USA) Former U.S. Army Corps of Engineers Manager Sentenced to Six Years in Prison in Bribery and Kickback Scheme

A former US Army Corps of Engineers program manager was sentenced to six years in prison for taking more than $1.25 million in bribes as part of a scheme in which corrupt public officials steered government contracts in exchange for more than $30 million in bribe and kickback payments.  Alexander produced and actively managed a $54 million budget.  The scheme involved the Army Corps of Engineers and two contracts: the Technology for Infrastructure, Geospatial, and Environmental Requirements (TIGER) contract and the Contingency Operations Readiness Engineering & Support (CORES) contract.  The TIGER contract was used by authorized federal government agencies and departments to purchase products and services. It is what is known as an Indefinite Delivery/Indefinite Quantity contract. Authorized agencies and departments are not required to obtain three separate bids or to compare the TIGER contract to another contract before submitting an invoice for products and services through the TIGER contract.  The CORES contract was a planned contract, envisioned as an alternative or potential replacement to the TIGER contract. As planned, the CORES contract would be a five-year contract with an award potential for all contracts placed under it of up to $1 billion. As a result of the investigation, which disrupted the ongoing bid-rigging scheme, the CORES contract was not issued for solicitation to potential prime contractors.  In his guilty plea, Alexander admitted to carrying out the bribery scheme with others, some of whom have already plead and await sentencing.


9/6/2012 FCW: The Business of Federal Technology (Washington D.C.) ‘Byzantine warren of fiefdoms’ makes contracting fraud hard to stop

David Williams, the U.S. Postal Service’s Inspector General and an anti-fraud pioneer tips his hand regarding his unconventionally creative (and effective) approach to fighting fraud with this unforgettable quote: “[Our government has] a Byzantine warren of procurement fiefdoms, each with their own contracts, accounting system and contract numbering system….[There are] rickety silos, perfect breeding grounds for black swans. We have a labyrinth of dead ends and walled cities. If you try to look across government, you’re not going to get any further than the one part you’re operating in.”   Whether it is Obama II or Romney I come November, look to renewed interest and support  for the Digital Accountability and Transparency Act (H.R. 2146) as a means of standardizing contracting and grant data.