North Carolina man sentenced for $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 was sentenced in federal court today for his role in a conspiracy to defraud the federal government of more than $225,000.
Jeffrey Blake, 55, of Cornelius, N.C., was sentenced by U.S. District Judge Ortrie D. Smith on Friday, Jan. 7, 2011, to 14 months in federal prison without parole. The court also ordered Blake to pay $225,213 in restitution.
“We will not tolerate the theft of public funds,” Phillips said. “Vendors and others who abuse their federal contracts by defrauding the government will be held accountable for their criminal behavior.”
Brian D. Miller, Inspector General of the U.S. General Services Administration, Office of Inspector General, stated, “when contractors choose to commit fraud against the United States government through GSA procurement programs, our office will vigorously pursue these criminal violations to maintain the integrity of GSA procurement programs and ensure the taxpayers trust.”
On Sept. 29, 2010, Blake pleaded guilty to conspiracy to defraud the government. In a separate but related case, Michael Morand, 50, of Rohnert Park, Calif., pleaded guilty and was sentenced to five years of probation for his role in the conspiracy to defraud the government. Morand is jointly and severally liable with Blake for $225,213 in restitution.
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 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.
This case was 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.