NCJ Number
110276
Journal
FBI Law Enforcement Bulletin Volume: 57 Issue: 3 Dated: (March 1988) Pages: 16-19
Date Published
1988
Length
4 pages
Annotation
In October 1985, the FBI, the Department of Defense, Office of the Inspector General-Defense Criminal Investigative Service (DCIS), and the Internal Revenue Service (IRS) joined forces in Los Angeles to conduct an investigation, called 'Operation Defcon,' into kickback schemes related to defense contracts and subcontracts.
Abstract
In most kickback schemes, a portion of the kickback is paid 'up front' as the contract or purchase order is awarded. The remainder is paid when the contract performance has been completed. These schemes have the effect of falsely increasing the costs to the Federal Government for goods and services. Some methods used in kickback schemes include 'bid rigging,' 'courtesy bidding,' 'sole source contracts,' and 'bid-bumping/overage.' By combining the unique abilities and expertise of special agents from the FBI, DCIS, and IRS, the task force is uniquely able to investigate kickback schemes. The inclusion of the IRS in the investigations has allowed charges to cover tax evasion in addition to kickback charges. The task force is located in a centralized office, allowing for daily contact between investigators. A special hotline has been established to accept information from the public regarding defense procurement fraud. The task force continues to identify, investigate, and prosecute persons involved in defense fraud. 8 footnotes.