Three military contractors have been convicted by a federal jury in the Northern District of Georgia on one count of conspiring to defraud the United States and two counts of major fraud after coordinating to prepare sham quotes totaling almost $8 million.

Former Envistacom LLC president and co-founder Alan Carson, former Envistacom Vice President Valerie Hayes, and Philip Flores, listed in the indictment as the owner and founder of a conspiring company based in Virginia, conspired to defraud the United States from September 2014 through November 2016, according to a news statement issued March 29 by the Department of Justice.

Envistacom is a Duluth, GA-based technology business specializing in communications, cyber, and intelligence solutions for Defense and Space Manufacturing, according to its LinkedIn page. Flores' company is identified in the indictment as "Co-Conspirator A," alongside five other co-conspirators, including an Envistacom employee, a Virginia company owned by an Envistacom employee and a U.S. government employee in Mechanicsville, Maryland.

Envistacom's website was apparently offline April 19, and the company did not immediately respond to an ENR request for comment.

The federal government accused them of preparing and procuring sham quotes for government contracts totaling more than $7.8 million, the statement said. 

Flores' company, after securing fixed-price contracts in the Small Business Administration's 8(a) program, paid Envistacom as a subcontractor after coordinating in preparing sham quotes with the help of other co-conspirators, according to the indictment, including from a company owned by Flores' wife. 

“As this case demonstrates, those who attempt to defraud the government will be held accountable,” Special Agent in Charge Scott Moreland of the Department of the Army Criminal Investigation Division (CID) Major Procurement Fraud Field Office, said in the statement.

According to the indictment, Carson, Hayes and Flores also fraudulently prepared “independent” government cost estimates and other procurement documents for the award of these contracts and made false statements, representations, and material omissions to federal government contracting officials regarding these estimates being legitimate independent cost estimates and the sham quotes being “competitive.”

Carson, Hayes and Flores were convicted of conspiracy to defraud the United States and major fraud. No date has been set for sentencing. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other relevant factors.

The individuals each face a maximum penalty of five years in prison and a fine of $250,000, or twice the pecuniary gain or loss, for conspiracy to defraud the United States. The maximum penalty for major fraud is 10 years in prison and a fine of $1 million, or, if the gross loss to the government or the gross gain to a defendant is $500,000 or greater, a fine of $5 million. 

“The Division and its law enforcement partners will continue to prosecute individuals who undermine the integrity of government procurement systems at American taxpayers’ expense,” Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division said in the statement.

The investigation was conducted by the Antitrust Division’s Washington Criminal II Section, the U.S. Attorney’s Office for the Northern District of Georgia, Army CID, and the federal Defense Criminal Investigative Service.

“Contractors are an integral part of our well-functioning government, and we expect them to be honest and forthright,” said U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia in the statement. “The evidence at trial and the jury’s verdict show that these defendants placed their own benefit above honest dealings with the government.”