University of Pittsburgh Procurement Fraud Brief Resident Agent in Charge Mick Hipsher Special Agent Brian Grant U.S. Army CID Major Procurement Fraud Unit
2 MPFU Mission Conduct global investigations into fraud and corruption impacting Major Army Acquisition Programs, Major Construction Projects, Contingency Contracting, Grants and Cooperative Agreements, to preserve Combat Readiness and Soldier Safety as well as to protect the integrity of the Army procurement process. MPFU recoveries normally exceed the USACIDC yearly budget
Pacific FFO Laguna Niguel FRA Sacramento FRA Northwest FRA Korea FRA Fraud Field Offices North Central FFO Detroit FRA Indianapolis FRA Columbus FRA Rock Island FRA St. Louis FRA MPFU Deployed Elements Kuwait, Afghanistan Mid Atlantic FFO Washington Metro FRA Philadelphia FRA Boston FRA Hartford FRA Fort Drum FBO Maryland FRA Southwestern FFO Dallas FRA Colorado Springs FRA San Antonio FRA Phoenix FRA El Paso FBO Expeditionary FFO Expeditionary FRA European FRA Southeastern FFO Huntsville FRA Atlanta FRA Florida FRA Vicksburg FRA North Carolina FRA
What is Fraud? Fraud is a material representation of fact that is false. Procurement Fraud is the intentional wrongful or criminal deception within the process of government contracting resulting in financial or personal gain.
Challenges with Fraud Fraud is not clearly evident such as a general crime Non-compliance doesn t mean a crime has occurred difficulty is proving intent Demonstrating damage may be difficult Sophisticated / corporate subject(s) Often involves unfamiliar processes
Fraud Process Identify Detection Report Investigate Prevention
Detect: What are the Indicators of Fraud What should I be looking for? Indicators that would compel further inquiry Mistakes Criminal Activity Poor Management - Negligence Red Flags General Process
Indicators Red Flags Observed Funding Violations Collusion Signature Discrepancies Possible bid rigging by acceptance of Late RFQ/RFP Award to Other Than Low Offeror Inferior Product/Services Received Poor Contract File Documentation Acceptance of Questionable Product Officials Approving Beyond Their Authority False Statements False claims Undocumented Payment Abuse of Procurement Contracting Official Warrant Authority Product substitution
Who commits Procurement Fraud? Contractors Contracting Officers Contracting Officer Technical Reps Procurement staff Source selection committee members Others
Sources of Investigations Audits/Reviews Contracting Officers Procurement Fraud Advisors DoDIG Hotline Complaints Qui Tams Referrals from other CID offices Referrals from other DCIOs Proactive
Sources of Allegations/Complaints INTERNAL (DOD) DoD Hotline Office Civilian and Military Personnel Military Criminal Investigative Organizations Audit Agencies (DoD-OIG Audit, AAA, DCAA, DCMA) Proactive Initiatives EXTERNAL Contractors and Subcontractors Contractor Employees Ex-Spouses/ Significant Others Other Law Enforcement Agencies
Objective Make the Army whole (replace non-conforming products; gain future concessions; and recover all losses) Ensure the remedy is severe enough to serve as a deterrent Serve as a force multiplier Soldier safety, readiness, weapons systems and equipment
Operational Approach AOR Assessments Walking and Talking Crime Prevention and Fraud Awareness Attack significant cases Utilize full range of investigative tools & capabilities Case direction toward likely outcome Often based on AUSA direction TDY a must
Observations Deterrence and prevention through increased CID-MPFU presence combined with increased oversight by the Army Contracting Community and strict penalties imposed by the Department of Justice have contributed to a reduction in corruption involving US government contracting officials. Successes: Partnership (Contracting/ Legal/ Audit/ CID) Stiff penalties by DOJ Increase in Education / Awareness (Tailored Fraud Awareness Briefings Red Flags ) Increase in Professional Training by Army Contracting Command and the Defense Acquisition University Continued CID-MPFU deterrence
Partner Agencies US Army Criminal Investigation Command (CID) Defense Criminal Investigative Service (DCIS) Federal Bureau of Investigation (FBI) US Agency for International Development (USAID) US Air Force Office of Special Investigations (AFOSI) Department of State, Office of Inspector General (DOS/OIG) US Navy Criminal Investigative Services (NCIS) Special Inspector General Afghanistan Reconstruction (SIGAR) Special Inspector General Iraq Reconstruction (SIGIR)
Report: Mechanisms in Place Anonymous reporting Direct reporting to CID Major Procurement Fraud Unit Inspector General Procurement Fraud Advisor (PFA) Hotline s 16
Investigations: What to Expect? Preliminary Inquiry Request for Records US Attorney s Office Multiple Agencies Seizure of Evidence Grand Jury/Trial
Fraud Remedies Felony Indictment & Conviction Imprisonment/Jail Criminal Fines Civil Fines Restitution Suspension Debarment Job Termination
Prevention Tone at the Top Financial Disclosures; Ethics Opinions Crime Prevention Surveys Audit, IG (Compliance) Fraud Awareness Training Fraud Agents (Deterrent)
Questions
usarmy.belvoir.usacidc.mbx.philadelphia-fra@mail.mil Brian Grant Special Agent Philadelphia Fraud Resident Agency brian.c.grant.civ@mail.mil (610) 891-3985