1. The Legal Framework of Procurement Fraud
The prosecution of procurement fraud relies on a web of federal statutes designed to protect the treasury from waste and abuse and to ensure a competitive marketplace.
The government utilizes a "kitchen sink" approach to charging these cases. They will allege conspiracy and wire fraud and money laundering alongside specific procurement violations. This creates a high-stakes environment where a single transaction can trigger multiple felony counts.
We analyze the statutory basis of the government case. The False Claims Act is the primary weapon used by prosecutors. It imposes liability on any person who knowingly submits a false claim to the government for payment. We litigate the definition of "knowingly." We argue that the regulations are so complex that non-compliance was a result of confusion rather than a specific intent to defraud. We also defend against the Anti-Kickback Act which prohibits the exchange of anything of value to improperly obtain or reward favorable treatment in a contracting process.
The False Claims Act and Qui Tam Defense
Most procurement fraud investigations start with a whistleblower lawsuit filed under seal. The government investigates the allegations before deciding whether to intervene.
We defend against these qui tam actions. We attack the credibility of the whistleblower who is often a disgruntled former employee seeking revenge and a payout.
We scrutinize the allegations to see if they meet the strict pleading standards of the Federal Rules of Civil Procedure. We argue that the alleged false statements were immaterial to the decision of the government to pay the claim. If the government continued to pay the invoices despite knowing about the alleged non-compliance we argue that the defect was not material and therefore not fraud.
Conspiracy and Antitrust Violations
Bid rigging and price fixing are prosecuted as criminal antitrust violations under the Sherman Act. The government alleges that competitors colluded to suppress competition.
We defend against these conspiracy charges. We argue that the communication between the parties was legitimate market research or the formation of a lawful teaming agreement. We distinguish between a cartel and a joint venture. We analyze the market dynamics to show that the pricing was the result of economic factors rather than a secret agreement. We aim to keep the dispute in the realm of civil regulation rather than criminal prosecution.
2. Common Schemes and Methodologies
Procurement fraud manifests in diverse forms ranging from subtle bid manipulation and information leakage to blatant product substitution and phantom vendor schemes.
The government looks for patterns of favoritism and anomalies in the bidding process. Investigators use data analytics to identify relationships between vendors and purchasing officers that suggest a conflict of interest.
We conduct our own internal investigation to understand the facts. We review the emails and the financial records to see if there is evidence of a scheme.
Bid Rigging and Collusion
Bid rigging occurs when competitors agree in advance who will win a specific contract. This can take the form of bid suppression or complementary bidding where one party submits a high bid to make the designated winner look good.
We challenge the evidence of agreement. We argue that parallel conduct is not proof of conspiracy. If multiple vendors raised prices at the same time it may be due to a rise in raw material costs rather than collusion. We present economic expert testimony to explain the market behavior. We demonstrate that our client acted independently in their own self-interest.
Kickbacks and Pay-to-Play
Kickback schemes involve a vendor paying a procurement officer to steer a contract their way. The payment can be cash or gifts or a job for a relative.
We defend against kickback allegations by analyzing the value of the exchange. We argue that business courtesies such as meals or entertainment do not rise to the level of a bribe. We also investigate the decision-making process. If the vendor was the lowest bidder and offered the best product we argue that the contract was awarded on the merits and not because of the alleged kickback. We break the causal link between the gift and the official act.
3. Government Contracting and Set-Aside Fraud
Federal contractors face heightened scrutiny regarding their eligibility for specific programs where a simple misrepresentation of status can be elevated into a criminal procurement fraud indictment.
The government sets aside contracts for small businesses and veteran-owned companies and minority-owned enterprises. Obtaining these contracts through false certification is a major priority for the Department of Justice.
We represent companies accused of "pass-through" schemes where a large company uses a small business as a front to win set-aside contracts. We litigate the complex rules regarding control and affiliation.
Product Substitution and Defective Pricing
Delivering goods that do not meet the strict contract specifications is procurement fraud. This includes using cheaper materials or failing to perform required quality control tests.
We defend these cases by analyzing the contract language. We often find that the specifications were ambiguous or that the government approved the substitution. We rely on the doctrine of "substantial compliance." We argue that the product worked as intended and the government suffered no loss. We characterize the issue as a warranty dispute rather than a criminal fraud. We emphasize that a manufacturing defect is not the same as a fraudulent scheme.
8(a) and SDVOSB Fraud
The Small Business Administration runs programs like the 8(a) Business Development program for disadvantaged individuals. Prosecutors allege fraud when the disadvantaged individual is not actually running the company.
We defend the operational structure of the business. We show that the qualifying individual exercised day-to-day control and made the strategic decisions. We argue that relying on consultants or mentors does not violate the rules of the program. We challenge the government's interpretation of the "control" regulations which are often vague and contradictory. We prove that the certification was valid at the time it was made.
4. Internal Investigations and Corporate Defense
A proactive defense strategy begins with a thorough internal investigation to identify the scope of the exposure before the government issues a subpoena or executes a search warrant.
When a company suspects procurement fraud within its ranks it must act quickly to preserve evidence and determine whether to self-disclose to the government.
We guide corporations through this crisis. We interview employees and review documents to find the truth. We advise the board of directors on their fiduciary duties and their disclosure obligations.
Managing the Whistleblower Threat
If an employee reports fraud internally the company must handle the complaint correctly to avoid retaliation charges.
We advise on the investigation of the whistleblower complaint. We ensure that the whistleblower is protected from retaliation while we investigate the validity of their claims. If the claims are meritless we document the findings to defend against a future lawsuit. If the claims are valid we advise on the best path forward which may include a voluntary disclosure to the Inspector General to seek leniency.
The Cooperation Credit and Resolutions
The Department of Justice offers credit to companies that cooperate with investigations. This can mean the difference between a criminal conviction and a Deferred Prosecution Agreement (DPA).
We negotiate with the prosecutors. We present the results of our internal investigation and the remedial measures the company has taken. We argue that the company should not be indicted for the actions of a rogue employee. We seek resolutions that preserve the ability of the company to continue doing business with the government. We aim to resolve the matter with a civil settlement rather than criminal charges.
5. Defending Against Procurement Fraud Allegations
Effective defense requires challenging the government on the element of intent and demonstrating that the alleged fraud was actually a contractual misunderstanding or a legitimate business strategy.
We do not let the government criminalize capitalism. We force them to prove that the defendant acted with a corrupt purpose.
We use the complexity of the procurement system as a shield. The rules are often so dense that even government contracting officers do not understand them.
Lack of Criminal Intent
We argue that the defendant acted in good faith. If a contractor relied on the advice of counsel or the guidance of a contracting officer they cannot be guilty of fraud.
We present evidence of the confusion surrounding the contract terms. We show that the client attempted to comply and was transparent in their dealings. We argue that an error in billing or a misunderstanding of a regulation does not constitute procurement fraud. We cite the "scientific disagreement" defense in cases involving technical specifications. If experts disagree on whether a product met the spec there is no fraud.
Attacking the Loss Calculation
In federal fraud cases the sentence is driven by the loss amount. The government often claims the entire value of the contract as the loss.
We fight this calculation. We argue for the "credit against loss" rule. If the government received the goods and used them the loss is not the full contract price. The loss is the difference in value between what was promised and what was delivered. If the government got a functioning building or a working software system the loss might be zero. We use forensic accountants to calculate the actual economic harm which minimizes the sentencing exposure.
6. Why Clients Choose SJKP LLP for Procurement Fraud
We combine the forensic accounting capabilities of a specialized audit firm with the courtroom dominance of a federal defense practice to protect your business from the crushing weight of the federal government.
At SJKP LLP we understand that an allegation of procurement fraud is an existential threat. It threatens your liberty and your livelihood and your legacy.
Our firm is chosen because we know the Federal Acquisition Regulation better than the agents investigating you. We know how to trace the flow of funds to prove your innocence. We have the resources to analyze millions of documents to find the email that authorizes your actions.
We act quickly to intervene with the U.S. Attorney. We present detailed legal briefs that explain why the conduct was lawful. We negotiate from a position of strength because we are prepared to take the case to trial. Whether you are a CEO facing a grand jury or a company facing suspension and debarment SJKP LLP provides the sophisticated and unwavering advocacy necessary to secure your future.
09 Jan, 2026
