Three military contractors convicted of $7 million procurement fraud scheme

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A federal jury in the Northern District of Georgia convicted three military contractors on one count of conspiring to defraud the United States and two counts of major fraud.

According to court documents and evidence presented at trial, former Envistacom LLC President and co-founder Alan Carson, former Envistacom Vice President Valerie Hayes, and the owner of another company, Philip Flores, conspired to defraud the United States at least from September 2014 through November 2016, by preparing and procuring sham quotes for government contracts totaling over $7.8 million. Carson, Hayes, and Flores also fraudulently prepared “independent” government cost estimates and other procurement documents for the award of these contracts and made false statements, representations, and material omissions to federal government contracting officials regarding these estimates being legitimate independent cost estimates and the sham quotes being “competitive.”

Carson, Hayes, and Flores were convicted of conspiracy to defraud the United States and major fraud. The individuals each face a maximum penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain or loss, for conspiracy to defraud the United States. The maximum penalty for major fraud is 10 years in prison and a fine of $1 million, or, if the gross loss to the government or the gross gain to a defendant is $500,000 or greater, a fine of $5 million. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other relevant factors.

The Antitrust Division’s Washington Criminal II Section, the U.S. Attorney’s Office for the Northern District of Georgia, Army CID, and DCIS investigated the case.

Trial Attorney Brittany E. McClure of the Antitrust Division and Assistant U.S. Attorney Christopher J. Huber for the Northern District of Georgia prosecuted the case.