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Federal Government Contractors – Watch Out For Fraud Prosecutions

For many federal contractors, TARP and the American Recovery and Reinvestment Act are a godsend. The economy isn’t great overall, but the federal government is still spending. This is good for the economy around Washington, D.C., and it’s good for those who sell services and products to the federal government.

The government, though, has a concern about fraud in government contracting. Some of this is generic. Every agent with an Office of Inspector General can tell you that his or her job is to combat waste, fraud, and abuse. Even in normal times, Inspector General offices spend a lot of time investigating whether federal contractors have engaged in fraud. As a result, even in normal times, government contractors need to take reasonable steps to prepare themselves in case an OIG agent comes calling.

But these are not normal times. The federal government is spending an astounding amount of money, and it’s worried that this spending is ripe for fraud. The Department of Justice’s Criminal Division is gearing up to investigate and prosecute those who receive government funds and who they suspect of fraud. The White House has unveiled a web page where anyone can track the spending from the Recovery Act and it’s express purpose is to prevent fraud.

Perhaps this will mean only that those who engage in shady activity have a higher likelihood of being prosecuted. What I worry will happen, though, is that the government will prosecute where it could better regulate, and that good, but perhaps sloppy, federal contractors, and their employees, will be caught up in politically created prosecutions and investigations.

Of course, time will tell.

If you have questions about how federal criminal charges are different than state criminal charges, please visit this page on Maryland federal criminal charges or Washington DC federal criminal charges.

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