north carolina man pleads guilty to $225,000 scheme to defraud the federal government
KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a North Carolina man pleaded guilty in federal court today to his role in a conspiracy to defraud the federal government of more than $225,000.
Jeffrey Blake, 55, of Cornelius, N.C., waived his right to a grand jury and pleaded guilty before U.S. District Judge Ortrie D. Smith to a federal information that charges him with conspiracy to defraud the government.
“When an individual defrauds the United States government, he is stealing from every citizen and taxpayer,” Phillips said. “On behalf of the public, we will vigorously prosecute those who attempt to illegally enrich themselves at the public’s expense.”
Lee Quintyne, Special Agent in Charge of the U.S. General Services Administration, Office Of Inspector General (Southeast Region), stated “this investigation demonstrates that those who choose to defraud the government for their own personal gain will be brought to justice. These types of crimes against the government will not be tolerated and will be thoroughly investigated with our law enforcement partners and the United States Attorney's Office.”
In a separate but related case, Michael Morand, 50, of Rohnert Park, Calif., pleaded guilty on May 6, 2010, to his role in the conspiracy to defraud the government.
Blake was the founder and president of M & A Supply, which was an approved vendor to provide goods and services to the federal government. Morand worked as a contract employee for M & A Supply. Blake and Morand have each admitted that, from May 2005 to September 2006, they conspired to defraud the government by obtaining more than $225,000 in payments for fraudulent claims based on inflated invoices for shipping expenses.
M & A Supply, through its contract with the General Services Administration, filled numerous orders for GSA customers, including several agencies within the Department of Defense. M & A Supply would have the material shipped to the customer, then the transportation company would send an invoice to M & A Supply for the cost of shipping. Instead of forwarding these legitimate shipping invoices to GSA for reimbursement, Blake and Morand admitted, they caused falsely inflated invoices to be created in the name of another company, Disabled American Veterans Supply, LLC, which was incorporated by Blake in the state of Nevada in 2004.
These fraudulent invoices from Disabled American Veterans Supply were submitted to the GSA’s Heartland Finance Center located at 1500 E. Bannister Road, Kansas City, Mo., along with an invoice from M & A Supply falsely indicating that the company had already paid the inflated amount for shipping expenses. As a result of this conspiracy, GSA paid in excess of $225,000 in falsely and fraudulently inflated shipping expenses to M & A Supply.
Under federal statutes, Blake and Morand are each subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000 and an order of restitution. Sentencing hearings will be scheduled after the completion of presentence investigations by the United States Probation Office.
This case is being prosecuted by First Assistant U.S. Attorney David Ketchmark. It was investigated by the General Services Administration, Office of Inspector General and the Defense Contract Audit Agency.