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As previously discussed on this blog, in February
a North Carolina jury found Brent Brewbaker, a former executive of
Contech Engineered Solutions LLC, guilty of antitrust and fraud
charges arising out of his involvement in rigging bids for projects
that were submitted to the North Carolina Department of
Transportation. The case was the first jury trial spearheaded by
the DOJ’s Procurement Collusion Strike Force (PCSF or Strike
Force) since its inception in 2019.
Earlier this month, US District Judge Louise W. Flanagan
sentenced Brewbaker to 18 months in prison on each count of the
antitrust and fraud charges, to be served concurrently. He faced a
maximum sentence of 10 years in prison for the conspiracy to rig
bids count and 20 years for each of the other counts: one count of
conspiracy to commit mail or wire fraud, three counts of mail
fraud, and one count of wire fraud. Brewbaker also is required to
pay $111,600 in fines and serve a two-year term of supervised
release. Contech was ordered to pay a $7 million criminal fine
and more than $1.5 million in restitution after it pleaded guilty
to one count of conspiracy to rig bids and one count of conspiracy
to commit mail and wire fraud in connection with the same scheme as
Mr. Brewbaker last year.
Takeaways
This sentence marks a victory for the Antitrust Division, which
has suffered trial losses in other recent cases. In announcing the sentence, Assistant Attorney
General Jonathan Kanter commented that the sentence “reflects
the seriousness of offenses that subvert the competitive process,
target state and local governments, and ultimately cost taxpayers
money.” He further commented that “[t]he division and its
Procurement Collusion Strike Force (PCSF) partners remain committed
to holding executives accountable when they choose to cheat instead
of compete.”
In light of anticipated government spending under the Inflation Reduction Act, Infrastructure Investment and Jobs Act and the
CARES Act, the PCSF is expected to be active
and aggressive in pursuing collusion and fraud in government
procurement. Brewbaker’s conviction will embolden the PCSF to
continue to pursue conduct outside of traditional antitrust, such
as fraud and false statements in bidding documents.
Steps To Avoid Trouble
The potential for stepped-up enforcement of antitrust and
related laws against companies operating in the government
procurement space will require companies to update their compliance
programs to manage the heightened risk. These measures may include
instituting and utilizing robust compliance policies and
procedures; coordinating training targeted towards avoiding
anticompetitive conduct and ensuring procurement integrity in
connection with the bidding process; and continually auditing and
monitoring the efficacy of the program.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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