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A federal judge in the Northern District of Georgia has sentenced three military contractors for their roles in a multi-year procurement fraud scheme related to more than $7 million in federal government contracts.
Former Envistacom LLC president and co-founder Alan Carson was sentenced on Nov. 30 to six months in prison and two years of supervised release and was ordered to pay a criminal fine of $250,000. The owner of another company, Philip Flores, was sentenced on Oct 30 to four months in prison and two years of supervised release and was ordered to pay a criminal fine of $50,000; and former Envistacom vice president Valerie Hayes was sentenced on Dec. 1 to 12 months of home confinement with three years of probation, and ordered to complete 100 hours of community service.
A federal jury previously convicted the three individuals of conspiring to defraud the United States and committing major fraud. According to court documents and evidence presented at trial, the three military contractors prepared and procured sham quotes and fraudulently prepared procurement documents.
“When contractors defraud the federal government, they undermine the integrity of the federal contracting system,” said Deputy Assistant Attorney General Manish Kumar of the Justice Department’s Antitrust Division. “These sentencings send a clear message that the Antitrust Division and its law enforcement partners will not tolerate procurement fraud.”
“The defendants served as federal contractors with a duty to lawfully act on behalf of the government,” said U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia. “Instead, these executives chose to defraud the United States and are now being held accountable for their actions by serving prison sentences and paying substantial fines.”
“These sentencings should serve as a deterrent to any company or individual seeking to subvert the government procurement system to obtain contracts,” said Special Agent in Charge Darrin K. Jones of the Department of Defense (DoD) Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS, along with our law enforcement partners, remain committed to protecting the integrity of the DoD contracting process that supports our nation’s warfighters.”
“These sentencings should serve as a stark reminder that our agents, and those of our partner law enforcement agencies, are relentless in their pursuit of those who choose to defraud the government,” said Special Agent in Charge Andrew Johnson of the Department of the Army Criminal Investigation Division’s (Army CID) Fraud Field Office.
The Justice Department’s Antitrust Division’s Washington Criminal II Section, the U.S. Attorney’s Office for the Northern District of Georgia, Army CID and DCIS investigated the case.
Trial Attorney Brittany E. McClure of the Justice Department’s Antitrust Division and Assistant U.S. Attorney Christopher J. Huber for the Northern District of Georgia prosecuted the case.
Anyone with information about this investigation or other procurement fraud schemes should notify the Procurement Collusion Strike Force (PCSF) at www.justice.gov/atr/webform/pcsf-citizen-complaint. The Justice Department created the PCSF in November 2019. It is a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government – federal, state and local. For more information, visit www.justice.gov/procurement-collusion-strike-force.