NEWS RELEASE
OFFICE OF THE UNITED STATES ATTORNEY
WESTERN DISTRICT OF MISSOURI
BETH PHILLIPS
Contact Don Ledford, Public Affairs ? (816) 426-4220 ? 400 East Ninth Street, Room 5510 ? Kansas City, MO 64106
www.justice.gov/usao/mow/index.html
MAY 6, 2010
FOR IMMEDIATE RELEASE
CALIFORNIA MAN PLEADS GUILTY TO $225,000 SCHEME
TO DEFRAUD THE FEDERAL GOVERNMENT
KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a California man pleaded guilty in federal court today to his role in a conspiracy to defraud the federal government of more than $225,000.
Michael Morand, 50, of California, waived his right to a grand jury and pleaded guilty before U.S. District Judge Ortrie D. Smith this afternoon to a federal information that charges him with conspiracy to defraud the government with respect to claims.
Morand worked as a contract employee for M & A Supply, which was an approved vendor to provide goods and services to the federal government. Morand admitted that, from May 2005 to September 2006, he conspired with others to defraud the government by obtaining more than $225,000 in payments for fraudulent claims based on inflated invoices for shipping expenses.
M & A Supply, through its contract with the General Services Administration, filled numerous orders for GSA customers, including several agencies within the Department of Defense. M & A Supply would have the material shipped to the customer, then the transportation company would send an invoice to M & A Supply for the cost of shipping. Instead of forwarding these legitimate shipping invoices to GSA for reimbursement, Morand admitted, conspirators caused a fraudulent and falsely inflated invoice to be created with a substantial mark-up added to the shipping expense. These fraudulent invoices were submitted to GSA, along with an invoice from M & A Supply falsely indicating that the company had already paid the inflated amount for shipping expenses.
In fact, Morand admitted, in several incidents, the actual items had not even been shipped by the time the invoices were submitted to GSA for reimbursement.
As a result of this conspiracy, GSA paid in excess of $225,000 in falsely and fraudulently inflated shipping expenses to M & A Supply.
Under federal statutes, Morand is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by First Assistant U.S. Attorney David Ketchmark. It was investigated by the General Services Administration – Office of Inspector General and the Defense Contract Audit Agency.
