US charges 6 for conspiring to defraud agencies through IT contracting schemes

The Justice Department charged six people for working to defraud a number of government agencies, including those in the defense and intelligence community, through a series of bidding, kickback and bribery schemes, the agency said Tuesday.

The move is among “the first charges in the Justice Department’s ongoing investigation into IT manufacturers, distributors and resellers who sell products and services to government purchasers including the intelligence community,” Justice said in a statement. 

Victor Marquez, who owns two IT companies with sizable government contracts, faces a four-count indictment on charges of wire fraud conspiracy, wire fraud and major fraud against the U.S. for rigging bids and inflating contract payments. Two others that worked alongside him, Antwann C.K. Rawls — an employee at one of his companies — and Scott Reefe — an IT sales executive — were also charged.

Court documents filed in Maryland alleged the trio exchanged bid information prior to submitting offers, with one emailing that he would file a “high price third bid.” Marquez and his accomplices submitted these coordinated bids in full knowledge that the government sought independent, competitive submissions for the contracts, and in spite of Marquez’s certification of independent bidding, Justice claims.

The government often awards the contract to the lowest reasonable bidder or the one offering the best value, depending on circumstances. In cases of bid rigging or fraud, firms conspire to manipulate the bidding process by coordinating bids to undermine competition and illegally increase their returns. Marquez did not respond to a request for comment.

Separately, Breal Madison Jr. was indicted on 13 counts, including conspiracy, bribery of a public official, mail fraud and money laundering for orchestrating a multi-year scheme that defrauded his employer out of over $7 million in relation to the sale of IT products to various government agencies.

IT contractor Brandon Scott Glisson, who provided services to the U.S. government, along with his supervisor, Lawrence Eady, a former senior government official, have been charged for their respective parts in the scheme with Madison.

Madison and his co-conspirators plotted to steal funds from his employer at the time, Rubrik, and government agencies. He funneled more than $9 million in stolen proceeds to his shell company, Trident Technology Solutions, as well as another shell entity, according to the allegations.

The DOJ served Rubrik, a cloud cybersecurity firm, with a grand jury subpoena last October regarding a former employee who had worked in its sales division, citing potential violations of federal law in connection with government contracts.

“We are deeply disturbed by the alleged conduct by a former employee related to a scheme to defraud Rubrik and the government. The alleged behavior is inconsistent with our values and business ethos and is in violation of our code of conduct and other company policies. As previously disclosed in public filings, we have been cooperating with authorities and will continue to do so,” a Rubrik spokesperson told Nextgov/FCW.

Madison didn’t return a request for comment.

“Antitrust crimes can undermine competition for products and services that are vital to our national security,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division in a press release. “When fraudsters siphon taxpayer funds, the Antitrust Division and its Procurement Collusion Strike Force (PCSF) partners across the government will hold accountable those who collude to subvert competition, line their pockets with federal procurement dollars and compromise the integrity of our intelligence community programs.”

Officials from the Defense Criminal Investigative Service, FBI, National Security Agency Office of Inspector General and CIA Office of Inspector General also issued statements affirming their offices’ commitments to stopping such fraud schemes.