A federal grand jury in the Eastern District of Texas returned an indictment charging a military contractor with bid-rigging and defrauding the U.S. on public military contracts in Texas and Michigan.
The Justice Department announced the indictment in a press release last week.
“U.S. taxpayers deserve to know that the government contracting process is not subverted through collusion,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division in the release.
“Bid rigging undermines the competitive process, wastes taxpayer dollars, and deprives businesses that follow the rules of fair competition. Investigating and prosecuting this case and others involving government contracting is a top priority for the Department of Justice and all members of the Procurement Collusion Strike Force,” Kanter added.
According to the indictment, Aaron Stephens, 52, conspired with multiple co-conspirators from at least May 2013 to at least April 2018 to rig bids on specific government contracts to create the appearance of competition and secure government payments as well as to defraud the United States.
As reported in the Texarkana Gazette, Stephens and unnamed co-conspirators agreed with each other to bid on contracts in such a way that it gave the false impression of competition, when in actuality, the bidders were working together.
In one of the schemes, Stephens and a co-conspirator each allegedly submitted bids on behalf of two different companies, with the goal of ensuring that another company they jointly owned would be able to do subcontracting work on the project for the company controlled by the co-conspirator.
Stephens and his co-conspirators allegedly engineered eight military contracts and received more than $15 million from the government in two separate schemes. The contracts were for work performed for the U.S. Army Contracting Command in Warren, Michigan, the Red River Army Depot in Texarkana, Texas, and the Sierra Army Depot in Herlong, California.
Stephens was charged in the United States District Court for the Eastern District of Texas with one count of bid-rigging in violation of the Sherman Act and two counts of conspiracy to defraud the United States.
According to the press release, the maximum penalty for conspiracy to defraud the U.S. is five years in prison, with a fine equal to twice the gain or loss associated with the offense.
The maximum penalty for restraining trade under the Sherman Act is 10 years in prison and a fine of $1 million.
The Antitrust Division’s Washington Criminal II Section is handling the case with help from the FBI’s Dallas Field Office, the U.S. Attorney’s Office for the Eastern District of Texas, and the U.S. Army Criminal Investigation Division’s Dallas Fraud Resident Agency.
The Department of Justice established the Procurement Collusion Strike Force (PCSF) in November 2019 to combat antitrust crimes and related fraudulent schemes affecting government procurement, grant, and program funding at the federal, state, and local levels.
“This indictment reflects the unrelenting approach and tenacity we employ daily in pursuing individuals who dare to attempt to defraud the federal government and the U.S. Army,” said L. Scott Moreland, special agent in charge of the U.S. Army Criminal Investigation Division’s Major Procurement Fraud Field Office.
Moreland continued, “When it comes to government contracting and purchasing, the superbly skilled and highly-trained special agents in our fraud unit use their finely honed investigation skills to combat and uncover fraud, deception, bribery, and other criminal acts.”
Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258 or visit http://www.justice.gov/atr/report-violations.
For more Dallas crime-related news, see how Dallas City Councilmember Chad West of District 1 was named The Dallas Express’ Crime Boss of the Month for January 2022.
