Government Contracts Monitor

The Only Thing Being Deployed by a Sham Contractor Named “Enterprise and Deployment” Were False Invoices to the Government

May 15, 2013

In a recent case in Texas, a federal jury convicted Donald Brewer, his wife Sherri Brewer, and James McKinney on multiple fraud counts for submitting false invoices under information technology contracts with the Air Force.  The Air Force Medical Support Agency purchased information technology systems for Air Force hospitals and medical treatment facilities through its Medical Systems Infrastructure Modernization (MSIM) program.   In 2002, while working for a company as an MSIM manager, Defendant Donald Brewer and the other defendants formed Enterprise and Deployment, LLC (“E&D”).  E&D signed an exclusive teaming agreement with Ark Systems, Inc. (“Ark”), a subcontractor that installed electronic cabling for information and telephone systems, including cabling work funded by the MSIM program.    During this time, defendant James McKinney also worked for Ark as the Vice President of Government Systems and managed all of Ark’s government subcontracts.

According to the indictment, E&D “owned no tools and equipment, performed no actual cabling work, borrowed no money, and carried no inventory.”  Nevertheless, E&D included “made up fees, charges, and profits” in its invoices to prime contractors. Therefore, the government alleged that E&D was a sham business that was inserted as an extra subcontractor between prime contractors and Ark just to inflate the invoices.   The indictment alleged that from 2002 to 2008, E&D obtained $33.5 million in subcontracts, and overcharged the Air Force by $6,445,370.

The Defendants were charged with 17 counts: one count of conspiracy to defraud the government, 12 counts of wire fraud, and three counts of major fraud against the government. The jury rendered guilty verdicts on all 17 counts.

The sentencing is set for June 28, 2013.  Based on the nature of the fraud and the calculations in the United States Sentencing Guidelines, the Defendants could face a significant period of incarceration.

 

Brian Stolarz is the attorney responsible for the content of this article.