Government Contractor Fraud
CJ 415 Section 1
In his book titled Trusted Criminals, Friedrichs defines white collar crime as “illegal or unethical acts…by persons of high or respectable social status for personal or organizational gain” (Friedrichs, 2010). This may well be true in the corporate world, but in the world of Defense Contractors, many are just regular people performing a job. These people seize an opportunity to steal sometimes millions of tax payer dollars for themselves. This paper will give a brief historical view in the post WWII era of how defense contracts are awarded and then explain how businesses and individuals have and continue to defraud the Government. Several examples from current cases will be given. These examples will show how the individuals responsible were caught and brought to justice. Since the end of World War II, the Government has been concerned about how to continue procurement of military equipment. During the war, there was no question about how these vital pieces of equipment would come into the military logistics system. Every company and business felt it to be a duty to provide the best equipment that could be mass produced to help the war effort. This was done through a competitive bid process and the contract was awarded to the lowest bidder. These contracts had a big influence on the economy and played a major role in the stock market. The very nature of defense contracts is different from other procurement type contracts. When a contract is awarded there are certain acts that might indicate that a contractor is attempting to commit fraud. “Cooking the books”, expense accounts with inaccurate entries, changing the product for something of less quality, these are just a few examples of what might send up signals to the investigators. There are several special investigative agencies that are responsible for monitoring defense contracts. The three main ones are: The DOD’s Defense Contract...
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