Thread: Feds give millions in contracts to firms owned by fictitious people

Feds give millions in contracts to firms owned by fictitious people

BY LUKE ROSIAK |
AUGUST 8, 2013

The case illustrates how little federal officials know about where goods and services they...A Maryland woman pleaded guilty Tuesday to charges related to setting up at least 15 false businesses in six states that received government contracts despite often being registered to people who did not exist.

The businesses subcontracted all the work to other companies, then took the federal dollars without paying the companies doing the work.

Larayne Whitehead, 34, of Clinton, Md., agreed to forfeit $2.4 million in illegal proceeds and a silver Audi.

"The conspirators typically operated under a particular business name for a period of six to 12 months until the business was either disqualified from the FedBid marketplace or was otherwise burdened with lawsuits or liens," the plea bargain said.

"The conspirators initially used their true names and addresses to register their businesses, but later attempted to conceal their true identities by using aliases to register the businesses and by renting commercial mail box store fronts."

The case illustrates how little federal officials know about where goods and services they purchase come from, with one Whitehead firm selling ammunition to the Army, according to government contracting records, thus raising questions about whether bullets of dubious quality wound up in soldiers' hands.

The Department of Homeland Security, with seemingly little investigation of the company's background, gave it a government credit card "to use for payment for goods provided pursuant to a government contract," on which Whitehead racked up $40,000 in charges.

It also highlights the lack of scrutiny of those receiving contracts under set-asides for small businesses and minorities, who simply self-certify, and who the government is pressured to source goods through over established vendors, even for goods like ammunition, which few fly-by-night firms are legitimately equipped to manufacture or supply.

The fake companies included the Encompass Group, which is registered to a ramshackle house in Maryland, touted its status as a black-owned firm and got contracts to do work for everything from teaching English to selling furniture, the Washington Examiner found.

As recently as last November, Sharper Consulting Inc., one of the companies used by Larayne Whitehead under her own name, got government business totalling nearly $145,000 by bidding on contracts for which only woman-owned businesses were eligible.
It got some $210,000 in business set aside for small businesses, and $19,000 in open competition. A phone call to its listed number went to an answering service that forwarded to a cell phone with no answer.
Winning a contract that most companies aren't eligible to bid on, and then having another company do all the work, is a typical minority contracting scheme, though Whitehead's differed in that she never paid the subcontractors.
The schemes are made easier by lax oversight of subcontracting by the government. Though the information is supposed to be submitted, federal databases include subcontracting information for only a small percentage of all contracts.
Companies winning a bid through a set-aside are not supposed to be able to subcontract the work, but with so little information available, federal officials have no way of enforcing it.
http://washingtonexaminer.com/feds-g...rticle/2534017

Clinton Woman Pleads Guilty in $2.3M Government Contract Fraud Scheme

Posted on August 07, 2013

GREENBELT, Md. (Aug. 7, 2013) -- Larayne Whitehead, age 34, of Clinton, Maryland, pleaded guilty today to conspiring to commit wire fraud in connection with a scheme to defraud businesses which supplied goods under government contracts.

The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.

According to her plea agreement, from December 2007 to May 2013, Whitehead and her co-conspirators used at least 15 businesses in Maryland, Delaware, Georgia, Nevada, North Carolina and Tennessee which they incorporated to bid on contracts to provide goods – such as books, snowmobiles, plants and paint – to federal, state and local government agencies. Most of the contracts were awarded using the FedBid online marketplace, which contractors use to compete for federal contracts through a reverse auction process. The conspirators’ businesses often submitted extremely low bids to secure the contracts. Once awarded the contracts, Whitehead enticed victim businesses to act as subcontractors and supply the goods required by contract by providing fake references and by falsely promising that the subcontractors would be paid after the government paid Whitehead. After the subcontractors delivered the goods required by the contracts, government agencies paid Whitehead, typically by electronic transfers to bank accounts set up in the business names but controlled by Whitehead. Whitehead fraudulently retained these proceeds for her own personal benefit and did not pay the subcontractors.

The conspirators typically operated under a particular business name for a period of six to 12 months until the business was either disqualified from the FedBid marketplace or was otherwise burdened with lawsuits or liens. The conspirators then continued the scheme under a newly-registered business name. The conspirators initially used their true names and addresses to register their businesses, but later attempted to conceal their true identities by using aliases.

Whitehead has agreed to forfeit $2,393,579 and a car.

Whitehead faces a maximum sentence of 20 years in prison and a fine of $250,000. U.S. District Judge Alexander Williams, Jr. scheduled her sentencing for January 14, 2014 at 12:00 p.m.

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 Procurement Fraud Task Force - chaired by Assistant Attorney General for the Criminal Division Lanny A. Breuer - includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of 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.

United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant U.S. Attorney Christen A. Sproule, who is prosecuting the case.

Source: Office of United States Attorney Rod J. Rosenstein
http://somd.com/news/headlines/2013/17040.shtml

LARAYNE WHITEHEAD This information is current as of August 28, 2012. There are 2 individuals that go by the name of Larayne Whitehead. These individuals collectively are associated with 2 companies. List of Companies with principals that go by the name of Larayne Whitehead: Principal Name: Larayne Whitehead (President) Company Name: Evian Group Inc. Status: Active Filing Date: 12/12/2012 Entity Type: Domestic Corporation File Number: E0633872012-6 Filing State: Nevada (NV) Registered Agent: Grace Hodge Principal Name: Larayne Whitehead (Secretary) Company Name: Worldwide Industries, Inc. Status: Admin. Dissolved Filing Date: 06/11/2004 Entity Type: Domestic Profit Corporation File Number: 0436049 Filing State: Georgia (GA) Registered Agent: Gloria Jones In North Carolina Global Synergy Group, Inc 13663 Providence Road # 370 Matthews, NC 28104-9373 map About Global Synergy Group, Inc Phone: (704) 254-9886 | Website: Information not found | Is this your company? Claim This Profile Top 5 Small Arms Ammunition near Matthews, North Carolina More Details for Global Synergy Group, Inc Global Synergy Group, Inc in Matthews, NC is a private company categorized under Small Arms Ammunition. Our records show it was established in and incorporated in North Carolina. Register for free to see additional information such as annual revenue and employment figures. Company Contacts Larayne Whitehead Chief Executive Officer Techelon Consulting, Inc 5960 Fairview Road # 100 Charlotte, NC 28210-3117 map About Techelon Consulting, Inc Phone: (704) 737-2250 | Website: Information not found | Is this your company? Claim This Profile More Details for Techelon Consulting, Inc Techelon Consulting, Inc in Charlotte, NC is a private company categorized under Book Manufacturers. Our records show it was established in 2010 and incorporated in North Carolina. Register for free to see additional information such as annual revenue and employment figures. Company Contacts Larayne Whitehead President ​http://www.manta.com/c/mtqfr87/techelon-consulting-inc

Did The DHS Just Award An Ammunition Contract To A Shell Corporation?

January 3, 2013
By James Smith
3 January 2013
na·ive Extremely simple and trusting: having or showing an excessively simple and trusting view of the world and human nature, often as a result of youth and inexperience
1. not shrewd or sophisticated: showing a lack of sophistication and subtlety or of critical judgment and analysis
2. artless: admirably straightforward and uncomplicated or refreshingly innocent and unaffected
Synonyms: simple, trusting, innocent, childlike, inexperienced, ingenuous, guileless
Bing Dictionary
On the 18^th of December, 2012 I wrote a story about how the Department of Homeland Security (DHS) had requested, through the Federal Law Enforcement Training Center (FLETC), an order for 200,000 rounds of 180 Grain, Jacketed Hollow Point Ammunition. Despite the fact that FLETC orders more ammunition that a human could possible expend in a lifetime.
And to be quite frank, these solicitations are very tiresome because we ask questions and no one seems to have any answers.
But once in a while you just fall onto a nugget that makes this task seem less Sisyphean and more of a worthy calling.
In reviewing the award granted to the “winner” of this contract, I see that the American Tax Payer is again, the loser. We’ll add up the tally later.
The winner of this contract is Evian Group, Inc. located at 105 South Eastern Ave, Las Vegas Nevada.
Well congratulations Evian Group, you’ve shown the Federal Government what it means to be naïve.
It seems that the Evian Group was formed on December 12, 2012, just 5 days before the announcement of the solicitation:

But wait, there’s more!
The contract for 200,000 rounds was $45,758, which boils down to about $0.21 per round. And to be quiet honest, that a really good price. As in, unheard of good price. So two websites were used for comparison. You’ll see that the price was less than half of what the other guys are charging.

The address provided to DHS and the Secretary of State is 105 S Eastern Avenue. Let’s use the NSA’s golden child, Google, to take a look what’s there:
What you see is the street corner of East Fremont Street and the intersection of North Eastern Avenue and South Eastern Avenue. On the opposite side of the street is an ARCO gas station.
Does anyone see a business capable of providing 200,000 rounds of jacketed hollow point rounds to the Federal Government? There’s not even a MailBoxes Etc to accept mail! 105 S Eastern Avenue looks like the parking lot for a bodega.
The listed principles, Grace Hodge and Larayne Whitehead, are director and president respectively. Nowhere can they be found attached to Evian Group, Inc, which is unusual as they whole purpose of running a business is to create a steady stream of revenue. They cannot be found on LinkedIn, where people network to get more business, or even in Google as a website. Eviangroup.com is parked by GoDaddy.com for a future site, and Bravenet is hosting Eviangroup.net.
Furthermore, no property or telephone records exist for principles. The people do not seem to exist in Nevada.
In reviewing the DUNS (Dun and Bradstreet) record, when the telephone number was called, it was not a business line, but a rather unusual phrase was used, “…[P]lease download line 2”.
So the question of the moment is this: Is this a payoff to a mobster or someone of less than honest intent, or is this graft for Harry Reid, the incumbent Senator for Nevada?
But, as usual, the truth will stay hidden because the government is not “for the people”, but against the people. Not “of the people” but of special interests. And it is certainly not “by the people”, because we know the difference from right and wrong. And as long as evil stays in power, the Nation, once mighty, will pass into the annals of history as a mere footnote.
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