Caddy, 62, of Huntington, Texas, pleaded guilty to two felony counts for conspiring to rig bids and defraud the U.S. Department of War in connection with four healthcare-related projects totaling over $1.6 million. The projects included the Medical Logistics Warehouse Project, Pharmacy Modernization and Renovation Project, Veterinary Clinic Project, and Dental Lab Clinic Project at Air Force Base Moody in Valdosta, Georgia.
According to court documents filed in the U.S. District Court for the Middle District of Georgia, one of Caddy's co-conspirators instructed him to submit intentionally higher prices and even provided specific pricing to include on bids. To conceal the scheme from the government, Caddy "re-write" certain bid forms "in [Caddy's] own handwriting" before transmitting them to a prime vendor, which then submitted the collusive bids to the U.S. Department of War.
The projects were funded through the Defense Logistics Agency's Facilities Maintenance, Repair, and Operations Program. The guilty plea marks the first conviction in an ongoing investigation into bid rigging and fraud impacting U.S. military facilities.
"Defending free and fair competition in healthcare spending is a critical priority for the Antitrust Division, particularly when it affects the U.S. military," said Acting Deputy Assistant Attorney General Daniel Glad. "The Antitrust Division's Procurement Collusion Strike Force and its partners will continue to find and prosecute those who corrupt the competitive process and increase healthcare-related costs in the United States."
"Bid rigging harms taxpayers, honest contractors and all of us who play by the rules, and will not tolerated," said U.S. Attorney William R. "Will" Keyes for the Middle District of Georgia. "The Department of Justice's Antitrust Division has been an invaluable partner in ensuring that competition remains free and fair in the Middle District of Georgia."
"The Air Force Office of Special Investigations remains steadfast in our mission to protect the integrity of Department of War procurement processes and safeguard resources critical to the readiness and welfare of our Airmen," said Special Agent in Charge Derrell Freeman of the Air Force Office of Special Investigations Southeast Field Office. "Bid rigging schemes like this undermine fair competition, inflate costs for essential healthcare infrastructure, and ultimately harm the brave men and women serving in our military. Working alongside our partners at the Antitrust Division, DCIS, and DLA OIG, we will continue to vigorously investigate and hold accountable those who seek to defraud the United States."
Caddy faces a maximum penalty of 10 years in prison and a $1 million fine for the Sherman Act violation, plus an additional maximum of five years in prison and $250,000 fine for the fraud conspiracy. Fines may be increased to twice the gain derived from the crime or twice the loss suffered by victims if either amount exceeds the statutory maximum. He is scheduled for sentencing on June 25.
The case was investigated by the Antitrust Division's Washington Criminal Section, Air Force Office of Special Investigations, Defense Criminal Investigative Service, and Defense Logistics Agency Office of Inspector General as part of the Justice Department's Procurement Collusion Strike Force. Trial Attorneys Daniel Chung and Christian Neumeister of the 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.
Whistleblowers who voluntarily report original information about antitrust and related offenses that result in criminal fines or other recoveries of at least $1 million may be eligible to receive rewards ranging from 15 to 30 percent of the money collected.