Plea Agreement in Multi-Year Bid Rigging Scheme Reinforces Administration Efforts to Root Out Fraud Within and Against the Federal Government
A former member of the U.S. Air Force pled guilty on April 1, 2026, for his role in a nine-year scheme that involved falsely inflating IT contracts by at least $37 million. The individual then used these funds to enrich himself, his family, a civilian USAF employee and other co-conspirators. In addition to his guilty plea, the former Airman agreed to pay $1.4 million in restitution to the U.S. Department of Defense (DoD).
According to a plea agreement, the defendant served as a Contracting Officer’s Representative and was responsible for drafting contracting and budgetary documents, including market research reports, Independent Government Cost Estimates (IGCE) and lists of material and labor required under federal contracts. In that position, he knew that he could not discuss or release source selection sensitive information, including IGCEs, to anyone without a need to know; direct contractors how to perform their work; accept special favors; or have a conflict of interest himself or through his family members’ interests. The defendant, along with coconspirators, built excess funding into contracts that were then used to enrich the defendant and coconspirators, as well as their friends and families. For example, the defendant’s IGCEs included unnecessary materials and labor, which he knew would not be supplied or performed under the associated contract but that the defendant’s coconspirators would bill the government for. The DoD and General Service Administration relied on the accuracy of the defendant’s falsified IGCEs and invoices in making financial decisions, to include awarding contracts and approving payments.
Following the defendant’s retirement in 2018, his former supervisor, a coconspirator, requested that he continue to draft IT contract requirements and related documents to facilitate the scheme. The defendant shared his IGCEs with coconspirator companies and then conspired with them on their bids so that an agreed-to coconspirator would win the contract. To receive payment for his role in the scheme, the defendant established a shell company through which he billed coconspirator companies as a subcontractor for non-performed labor and fictious parts that he never provided. The defendant and coconspirators created ledgers that tracked the excess funds built into the contracts and monitored the distribution of funds between the coconspirators.
A statement from Acting Deputy Assistant Attorney General Daniel Glad of the Justice Department’s Antitrust Division noted that, “Criminals who rig bids and commit fraud on government contracts steal from taxpayers and threaten the public’s confidence in government institutions. The Antitrust Division’s Procurement Collusion Strike Force will detect and prosecute those who rig bids and defraud their government customers.”
If you have any questions about criminal or civil investigations related to government procurements or corporate transactions, please reach out to your Cohen Seglias contact or contact any member of the Government Contracting Group or White-Collar Defense and Internal Investigations Group.
