DOBBINS, AFB, Ga. -- The Air Force Office of Special Investigations Procurement Fraud Detachment 5 helped uncover a $1.8 million bid-rigging scheme involving storage projects at two Air Force installations, leading to a June 2 guilty plea by a former industry employee.
Scott Srodes, 65, pleaded guilty to conspiring to rig bids and defraud the United States, according to the Department of Justice. The projects involved shelving and storage products for healthcare facilities at Moody Air Force Base, Georgia, and aircraft maintenance facilities at Nellis Air Force Base, Nevada.
According to court documents filed in the Middle District of Georgia, Srodes and his co-conspirators submitted collusive bids for multiple projects funded through the Defense Logistics Agency’s Facilities Maintenance, Repair and Operations Program.
In addition, court documents state the individuals exchanged pricing information before submitting bids and, at times, instructed each other on what prices to quote.
The Air Force Office of Special Investigations supported the investigation with the Department of Justice Antitrust Division, the Defense Criminal Investigative Service and the Defense Logistics Agency Office of Inspector General.
“AFOSI remains committed to protecting the integrity of [DAF] procurement processes and safeguarding resources that support Airmen, Guardians and mission readiness,” said Special Agent in Charge Derrell Freeman, AFOSI Det. 5. “We will continue working with our law enforcement partners to investigate fraud affecting Air Force programs and facilities.”
Srodes’ guilty plea is the second in an ongoing investigation into bid rigging and fraud affecting U.S. military facilities. The bid-rigging charge carries a maximum penalty of 10 years in prison and a $1 million criminal fine.
The conspiracy-to-defraud charge carries a maximum penalty of five years in prison and a $250,000 fine. A federal district court judge will determine Srodes’ sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Trial Attorneys Daniel P. Chung and Christian Neumeister of the Justice Department Antitrust Division’s Washington Criminal Section are prosecuting the case, with assistance from the U.S. Attorney’s Office for the Middle District of Georgia.
“Bid-rigging schemes are not victimless crimes,” said Jason Hein, AFOSI Procurement Fraud director. “It wastes taxpayer dollars and threatens the resources our warfighters rely on. We will continue working with our law enforcement partners to hold accountable those who attempt to defraud the government.”