Savannah, GA – In a major blow to defense contracting, Arena Event Services, Inc., also known as Arena Americas, has agreed to a settlement with the United States to resolve allegations that it wrongfully obtained small business set-aside contracts with the Department of Defense.
According to the settlement agreement, the United States contends that Arena Americas worked with Military Training Solutions, LLC (“MTS”) to obtain small business defense contracts that were supposed to be performed by MTS, but in reality were performed by Arena Americas. As a result of this scheme, which was perpetuated at Fort Stewart, Ga., and at other military installations across the United States, millions of dollars in defense contracts wrongfully were awarded to Arena Americas instead of legitimate small businesses.
"This settlement represents a dedicated effort to protect the taxpayers so we can be sure that those who do business with government agencies, particularly the military, do so entirely above board," said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia. "The U.S. Attorney’s Office will not tolerate any attempts to illegally exploit the system for a company’s personal advantage."
Through its investigation under the False Claims Act, the United States determined that Arena Americas paid MTS to bid on and obtain small business contracts that ultimately would be performed by Arena Americas. MTS previously entered into a settlement agreement with the United States to resolve its liability under the False Claims Act, and MTS owner Robert Obradovich pled guilty to one felony count of receiving unlawful kickbacks in a similar scheme.
"This issue was run to ground by the diligent efforts of our special agents along with our federal law enforcement partners," said Frank Robey, director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit. "We are very pleased with this civil settlement agreement pertaining to AES. This should be a clear indicator to others who might try to manipulate government contracts and requirements: No matter how deep one tries to bury the evidence, we will find it."
Arena Event Services, Inc. has agreed to pay up to $7.8 million to settle the case. The exact amount will be determined based on the company’s compliance with the terms of the settlement agreement.
This case is a stark reminder of the importance of holding those who do business with the government accountable for their actions. The U.S. Attorney’s Office will continue to work tirelessly to protect the taxpayers and ensure that those who engage in corrupt activities are held responsible.
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Key Facts
- State: Georgia
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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