Posted on 01/07/2012 6:28:01 PM PST by Libloather
How could a contracting scam avoid detection for so long?
By Del Quentin Wilber and Robert O’Harrow
The private contractors and government employees skimmed millions from the Army Corps of Engineers in what authorities have described as one of the most brazen contracting scams in federal government history.
From 2007 through September, the contractors and two program managers at the Army Corps inflated $25 million in contract orders by $20 million — pocketing the proceeds to buy cars, flat-screen televisions and expensive jewelry, federal prosecutors allege.
So where was the oversight? And how did the scam go on for so long?
Experts say taxpayers should not be surprised: It was only a matter of time.
“These guys took advantage of a number of well-known huge gaps and flaws,” said Charles Tiefer, a University of Baltimore professor who monitors contracting. “These are gaps that everyone in the oversight community knows should be closed. This was a failure of the system as a whole, not one little hole in the armor.”
(Excerpt) Read more at washingtonpost.com ...
Meanwhile, the Army Corps of Engineers has become polluted with rabid environmentalists and they in turn are pulling off a rather brazen land grab scam of their own.
Review of Corps of Engineers' projects has also been criticized for its lack of impartiality. The investigation of levee failure in New Orleans during Hurricane Katrina was sponsored by the American Society of Civil Engineers (ASCE) but funded by the Corps of Engineers and involved its employees.
How could a contracting scam avoid detection for so long?
Democrats?
People are talking about how compensation for physicians is so low that we are having a hard time paying our bills(we are). A much more crushing tactic is this use of RAC’s(Nazi mercenaries that collect money on every dime they can rake back from the docs)) to intimidate each and every doctor that accepts MediCare and/or MediCal.Examining,diagnosing, treating and fighting the bureaucracy for our patients is completely inconsequential as long as we spend our patient time with heads buried in a computer in the fervent hope that one keystroke of the new government mandated electronic technocracy is not misplaced. If I sound tired and disgusted, we all are.
Is this the tip of the Stimulus iceberg?
2007...Bush’s fault
This reminds me of my dealings of the Nuclear Regulatory Agency some 30 years ago. I worked in a plant that manufactured fuel rods for nuclear powerplants. They didn’t have a clue what they were looking at but they could sure check paperwork!
I hold many government contracts administered by the DOD / SDDC and GSA. The procedures in place regarding our contracts are so administratively intensive that they occupy the time of three full time positions just to handle the accounting. That is 10% of our staff. Even "innovations" by the government to speed along payments to vendors come at a price: US Bank oversees the Powertrac program for electronic invoicing. They, of course, deduct 2% of gross on all invoices for the "benefit" of being paid timely by the customer, ie our government. The only winner in the program is US Bank. When we review billing for accuracy, we are transmitted hundreds of pages of pending payments, most of which are eroneous. We comb through them for days each month to cancel the incorrect payments before they are made to us. Imagine that: we spend payroll dollars to prevent our government from overpaying us?!?!?!?
It is a tremendous pain in the A$$ and quickly becoming less reqarding for the effort. I'm getting nausea just thinking about it.
On behalf of your patients, thank you for caring enough to put up with all the manufactured hassles.
Several years ago a family friend finally decided he could take it no longer and closed his practice. Between the gov’t hoops and frivolous law suits it was taking too much of a toll on his family and his health. It was sad to see him stop practicing medicine, but I could hardly blame him.
Using ANC's as middlemen virtually guarantees success when bidding, numbers be damned.
Simply a massive scam, all set up by Ted Stevens.
Likely not uncommon at all.
I worry about the future for my daughter and her husband who are both in their second year of medical school.
She HAS TO hire Union workers if she needs laborers outside of her steady crew. She is amazed how equipment being replaced (that is still on good working order) is thrown in the trash as scrap rather than being re-purposed.
She actually suggested to a Government Drone that they should donate some refrigeration equipment that was being replaced to Charity and all she got in return was some eye rolling. Since it was at a Military Base, she was told nothing leaves in working order. It is dismantled and trashed.
I can only hope that is the exception to the rule, but I hold no illusions.
You have read the original article. This rip-off originated in corporations owned by Alaskan natives. Few if any natives are employed by these corporation but they get affirmative action preferences when bidding for Federale contracts. Even Clare MacKaskill is pissed off at these unfair preferences
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Sen. Claire McCaskill, a longtime critic of the Native corporation bidding advantage, sent a written statement to the Associated Press on Tuesday saying that the federal charges expose problems with the “large no bid contracts that Alaska Native Corporations are allowed to enjoy at the expense of American taxpayers.”
“The Alaska Native Corporations should compete for these large contracts and further should not be allowed to ‘front’ for other corporations that are actually doing the work,” McCaskill, a Missouri Democrat and chair of the Senate Committee on Contracting Oversight, said in the statement.
Read more here: http://www.adn.com/2011/10/04/2103721/4-charged-in-bribery-case-involving.html#storylink=cpy
Unsurprising, but not uncommon. If taxpayers could see just a small portion of the contracting fraud and abuse that goes on in the fed maybe something would be done about it.
I was told by C&P how to get around the bid process to award to the firm of my choice. I never did it, but I could throw fed business to anyone who made it lucrative for me to do so. All I had to do is write up the proposal to include something that needed to be done and could only be done by the contractor of my choice.
Minority contracts are a huge money waster in the fed as well. Of the 3 bids the minority usually gets it unless their bid is outrageously high. In my experience the minority contractor always won the job and managed to muck it up in the end. Just one: window cleaning contract won by minority contractor. Contractor shows up with two men to clean a 5 story building. Contractor has no supplies, no ladders, no scaffolding. My crew is sent to ‘assist’ (in other words perform) the contractors with the job to include supplies and scaffolding. Contractors walk off with a fat check, my crew is 3 days behind in their work, taxpayers have basically been double billed.
Pentagon Paid $998,798 to Ship Two 19-Cent Washers
By Tony Capaccio, bloomberg,com
August 16, 2007 15:16 EDT
Aug. 16 (Bloomberg) — A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to an Army base in Texas, U.S. officials said.
The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.
The owners of C&D Distributors in Lexington, South Carolina — twin sisters — exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled ``priority’’ were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.
C&D and two of its officials were barred in December from receiving federal contracts. Today, a federal judge in Columbia, South Carolina, accepted the guilty plea of the company and one sister, Charlene Corley, to one count of conspiracy to commit wire fraud and one count of conspiracy to launder money, Assistant U.S. Attorney Kevin McDonald said.
Corley, 46, was fined $750,000. She faces a maximum prison sentence of 20 years on each count and will be sentenced soon, McDonald said in a telephone interview from Columbia. Stroot said her sibling died last year.
Corley didn’t immediately return a phone message left on her answering machine at her office in Lexington. Her attorney, Gregory Harris, didn’t immediately return a phone call placed to his office in Columbia.
`Got More Aggressive’
C&D’s fraudulent billing started in 2000, Stroot, the Defense Criminal Investigative Service’s chief agent in Raleigh, North Carolina, said in an interview. ``As time went on they got more aggressive in the amounts they put in.’’
The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said.
``The majority, if not all of these parts, were going to high-priority, conflict areas — that’s why they got paid,’’ Stroot said. If the item was earmarked ``priority,’’ destined for the military in Iraq, Afghanistan or certain other locations, ``there was no oversight.’’
Scheme Detected
The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000. That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.
The Pentagon’s Defense Logistics Agency orders millions of parts a year. ``These shipping claims were processed automatically to streamline the re-supply of items to combat troops in Iraq and Afghanistan,’’ the Justice Department said in a press release announcing today’s verdict.
Stroot said the logistics agency and the Defense Finance and Accounting Service, which pays contractors, have made major changes, including thorough evaluations of the priciest shipping charges.
Dawn Dearden, a spokeswoman for the logistics agency, said finance and procurement officials immediately examined all billing records. Stroot said the review showed that fraudulent billing is ``not a widespread problem.’’
``C&D was a rogue contractor,’’ Stroot said. While other questionable billing has been uncovered, nothing came close to C&D’s, she said. The next-highest billing for questionable costs totaled $2 million, she said.
Stroot said the Pentagon hopes to recoup most of the $20.5 million by auctioning homes, beach property, jewelry and ``high- end automobiles’’ that the sisters spent the money on.
``They took a lot of vacations,’’ she said.
``They took a lot of vacations,’’ she said.
Did they spend 4 million on a Hawaiian vacation?
Just askin.
All the money spent on vacations cannot be recovered........they also invested in a losing cookie franchise.
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