Procurement Fraud: Couple Pleads Guilty to $30 Million Scheme (And More)

A Maryland couple has pleaded guilty to defrauding the government in connection with more than $30 million in set-aside contracts.

And, apparently not content with “mere” procurement fraud, the couple has also entered guilty pleas to charges of fraud under the Service Contract Act and tax evasion.

According to a Department of Justice press release, Shaun Tucker and Joanne Tucker were the controlling officers and majority shareholders of Quantell, Inc. and Intaset Technologies Corporation from 2007 to 2010.  Both companies provided labor services to the government.  The Tuckers sold Intaset in 2010, “but continued to have influence on the operation of Intaset.”

The DOJ states that between 2007 and 2013, the Tuckers and certain co-conspirators falsely represented the eligibility of Quantell and Intaset for SDVOSB, small business and other set-aside contracts.  According to the DOJ, “[t]he Tuckers and co-conspirators falsely represented the past revenues, ownership, controlling officers, distribution of profits, location, and other key attributes” of the companies.  And, when competing firms protested the companies’ eligibility, “the Tuckers and co-conspirators prepared and submitted false responses.”

As if that wasn’t enough, the Tuckers and their co-conspirators “used aliases and false identities” to communicate with the government, set up a fake company to supply past performance references to Quantell, and “had conspirators participate in false phone conversations with DOD representatives,” apparently to bolster their companies’ past performance records.

The procurement fraud netted Quantell and Intaset contracts valued at “at least $30 million.”  Apparently, the Tuckers used the money to live large, purchasing a 5,000 square foot home, a sailboat, luxury cars, and more.

While the Tuckers were busy enjoying the fruits of their fraud, their employees were not so lucky.  According to the DOJ, Quantell and Intaset failed to provide their employees with the fringe benefits required by the Service Contract Act for several years.  The Tuckers and their co-conspirators then “divert[ed] at least $1.6 million in SCA monies paid by the government to Quantell and Intaset under service contracts for their own personal benefit.”

Oh, and while they were at it, the Tuckers evaded nearly half a million in taxes.

This is one of the most blatant procurement fraud cases I have come across, and one would expect that the Tuckers will rot in jail for many years.  We’ll have to see about that.  According to the DOJ, if the Court accepts the plea agreement, Shaun Tucker will be sentenced to eight years in prison.  That sounds about right.  Joanne Tucker, on the other hand, will be sentenced to “between six and 18 months in prison.”  I am assuming there are mitigating circumstances in her case.  If not, six months in jail is a travesty for fraud of this magnitude.

The Tuckers, of course, will also have to pay financial penalties.  Shaun Tucker agreed to pay forfeiture of “at least $30 million” and Joanne Tucker “at least $20 million.”  Their home is subject to forfeiture, and the Tuckers have also agreed to pay $1.6 million in connection with the SCA fraud and reimburse the IRS for the evaded taxes.  No word on what happens to the sailboat and luxury cars.

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