Home Archived Articles $53M Fraud Costs Contractor Five Years in Federal Prison

$53M Fraud Costs Contractor Five Years in Federal Prison

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In April, the Department of Justice U.S. Attorney’s Office in the District of Maryland Judge Marvin Garbis sentenced John Wilkerson, age 51, to five years in prison, followed by three years of supervised release. The punishment was for a wire fraud conspiracy and for paying illegal gratuities to a government official in connection with the award of more than $53 million in federal government contracts. Garbis also ordered Wilkerson to pay forfeiture and restitution in the amount of $9,441,340.11.

This procurement fraud and illegal gratuities scheme decision was announced in a news release from the National Procurement Fraud Task Force by Acting United States Attorney for the District of Maryland Stephen Schenning; Commander of the Air Force Office of Special Investigations (OSI); Special Agent in Charge Robert Craig, Defense Criminal Investigative Service (DCIS), Mid-Atlantic Field Office; and U.S. Small Business Administration Acting Inspector General Mike Ware.

Involved and sentenced also were another contractor, Andrew Bennett, and a government employee, James Shank.

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The task force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and several other federal law enforcement agencies. This case, as well as other cases brought by members of the task force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

According to his plea agreement, Wilkerson was a Department of Defense account manager for Iron Bow Technologies, which provided information technology consulting and other services to government and industry customers. Wilkerson was also part owner and operated an information technology company, Superior Communications Solutions (SCSI).

Bennett, who was separately charged and has pled guilty, was a program manager for an information technology company, Advanced C4 Solutions (AC4S) from 2005 until 2011.

Shank, who was separately charged and has pled guilty, was a program manager at the United States Navy’s Space and Naval Warfare (SPAWAR) Systems Center. He also initiated the procurement process on more than 11 delivery orders that purchased telecommunications equipment and furniture as part of the Air Force project. Those delivery orders were issued to Iron Bow in 2010 and 2011; SCSI received approximately $33 million of the $35 million paid to Iron Bow under the various furniture and equipment delivery orders. Wilkerson charged the United States a 25% markup on furniture purchased under these two purchase orders, resulting in a profit to him of more than $6 million.

In addition, from 2010 until his retirement in June 2011, Shank falsely certified that the United States government received more than $1 million worth of goods under the W91QUZ-07-D-0010 contract that the government did not in fact receive.

In late 2010 or early 2011, Wilkerson offered Shank employment. Shank did not disclose that fact to anyone at SPAWAR and did not recuse himself from any of the contracts that benefited Wilkerson. In February 2011, Bennett left AC4S and went to work for Wilkerson at SCSI. Bennett received a $500,000 bonus when he joined SCSI, which was paid for by profit Wilkerson had earned on the furniture contracts.

Shank accepted employment with SCSI in May 2011, but was still working for SPAWAR when he approved more than $1.1 million worth of invoices that benefitted SCSI and Wilkerson.

Between July 2011 until August 2012, Wilkerson paid Shank approximately $86,000. The funds that Wilkerson paid Shank were funneled through T&M Communications, a company owned by “T.R.,” a senior executive at SCSI, who ultimately paid out the funds to Shank. Further, in some instances funds paid to Shank were also funneled through Decision Point Technologies, another company owned by Wilkerson. Shank did no work for Decision Point Technologies or T&M Communications during that time period.

For further details, visit www.justice.gov/usao-md/pr/defense-contractor-sentenced-5-years-federal-prison-53-million-procurement-fraud-and or https://tinyurl.com/knf7tzf.

To contact the DOJ’s U.S. Attorney’s District of Maryland about suspected fraud or abuse, call 410-209-4800. The office is located at 36 S. Charles Street, Baltimore.

Gloria Larkin is founder and CEO of TargetGov and a national expert in business development in the government markets. Email glorialarkin@targetgov.com, visit www.targetgov.com or call 866-579-1346 for more information.