Construction Company President Charged With Defrauding The State Department In Multimillion-Dollar Fraud Schemes

Press Release Construction Company President Charged With Defrauding The State Department In Multimillion-Dollar Fraud Schemes Friday, May 28, 2021 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Sina Moayedi Allegedly Paid Lucrative Bribes to State Department Insider in Exchange for Confidential Bidding Information, and Fraudulently Induced State Department to Pay His Company Approximately $100 Million Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael Speckhardt, the Special Agent in Charge of the U.S. Department of State, Office of Inspector General, announced the arrest today of SINA MOAYEDI, the owner of a construction company, on charges including bribery and fraud. MOAYEDI was arrested in Castleton, Virginia, and will be presented later today in the Western District of Virginia before U.S. Magistrate Judge Joel C. Hoppe. Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Sina Moayedi made misrepresentations about his employees’ qualifications and his company’s ownership in order to induce the State Department into awarding approximately $100 million in lucrative construction contracts to Moayedi’s company, Montage, Inc. Moayedi also allegedly cultivated a State Department insider, and paid the insider lucrative bribes in exchange for confidential State Department bidding information. Moayedi must now be held accountable for his alleged brazen fraud on the government.” Special Agent in Charge Michael Speckhardt said: “As alleged, the defendant’s scheme to undermine the Department’s procurement process for personal gain caught up with him today and he will now be held accountable. His alleged actions not only hurt other legitimate businesses competing for awards, but also damage the public’s trust in the effective and efficient utilization of taxpayer money.” According to allegations in the Complaint[1]: Montage, Inc. (“Montage”) is a U.S.-based business that is primarily involved in worldwide Government construction projects, including embassies, military posts, consulates, and similar overseas properties owned and operated by the United States Government. Montage has performed over $220 million in contracting work for the U.S. Government, including for the Department of Defense, the Department of Justice/Federal Bureau of Investigation, the State Department, the Department of the Interior, the Department of Agriculture, the National Aeronautics and Space Administration (“NASA”), the Equal Employment Opportunity Commission (“EEOC”), and the Department of Veterans Affairs. Since 2014, Montage appears to have focused primarily on competing for and obtaining contracts with the State Department. During that period, the State Department has awarded Montage approximately six overseas U.S. Embassy/Consulate construction project contracts totaling $100 million, in locales such as Ecuador, Spain, Sudan, the Czech Republic, and Bermuda. The founder of Montage is SINA MOAYEDI. Montage engaged in at least two fraud schemes. The first scheme alleges that, from approximately 2014 to September 2020, MOAYEDI and Montage lied that it was a female-owned business in order to secure unmerited advantages in the bidding process. By way of context, it is advantageous to a company, when bidding for federal government contracts, to be majority-owned by an individual from a socially or economically disadvantaged community. In fact, certain contracts (or portions of contracts) are “set aside” for – i.e., only available to – such companies. MOAYEDI and Montage repeatedly represented falsely in submissions to the State Department that Montage was female-owned, or female-owned and minority-owned, in order falsely to induce the State Department to award Montage lucrative construction contracts. In actuality, MOAYEDI repeatedly lied about Montage being a female-owned business, and indeed, MOAYEDI controls Montage and makes all material decisions on Montage’s behalf. As MOAYEDI revealed to a bank that inquired about Montage’s ownership status, “I am the sole owner and president of Montage and have always been.” Montage and MOAYEDI also repeatedly misrepresented, and significantly overstated, the qualifications of Montage employees. MOAYEDI made these misrepresentations in order to, among other things, meet State Department and contractual requirements for minimum experience in certain key positions. The second scheme charged in the Complaint is a bribery scheme during at least 2016 and 2017. Insider-1 is employed in the State Department’s Overseas Building Operations (“OBO”), which, according to OBO’s website, “directs the worldwide overseas building program for the Department of State and the U.S. Government community serving abroad.” Specifically, Insider-1 works for the State Department’s OBO Project Development and Coordination Division, European division. In connection with overseas construction projects, the State Department has a Technical Evaluation Panel (TEP) that considers all aspects of an offeror’s plan to execute the project. The TEP has the power to disqualify an offeror. Insider-1 oversaw the TEP for the Hamilton, Bermuda, project – a project that was awarded to Montage. In at least 2016 and 2017, MOAYEDI paid cash bribes to Insider-1 in exchange for confidential State Department bidding information relating to a particular multimillion-dollar contract in Bermuda, for which Montage was then bidding. In connection with the bidding process for the Bermuda project, Insider-1 informed MOAYEDI, in sum and substance, that: His bid was low; Montage could raise its bid by $300,000 and would still be the low bidder; and he should kick back 20 percent, or $60,000, to Insider-1 in return for this information. Shortly thereafter, Montage increased its bid by nearly $1 million. In a letter accompanying the revised bid, MOAYEDI falsely represented to the State Department that Montage’s revised bid was attributable to “an arithmetic error in our estimate worksheets.” MOAYEDI then paid Insider-1 $60,000 in cash, in three separate payments, using two men as intermediaries. * * * MOAYEDI, 66, of Chevy Chase, Maryland, is charged with one count of wire fraud, and one count of conspiracy to commit wire fraud, each of which carries a maximum potential prison sentence of 20 years, and one count of bribery of a public official, which carries a maximum potential prison sentence of 15 years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only; any sentencing of the defendant will be determined by the judge. Ms. Strauss praised the outstanding investigative work of the State Department, Office of Inspector General, Special Agents from the United States Attorney’s Office for the Southern District of New York, and the Internal Revenue Service. She also thanked Special Agents from the United States Attorney’s Office for the District of Columbia and the Montgomery County, Maryland, Police Department. The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case. Assistant U.S. Attorneys Michael D. Neff and Louis A. Pellegrino are in charge of the prosecution. [1]Links to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation. Contact James Margolin, Nicholas Biase (212) 637-2600 Updated May 28, 2021 Topics Financial Fraud Labor & Employment Public Corruption Component USAO - New York, Southern Press Release Number: 21-124

Press Release Construction Company President Charged With Defrauding The State Department In Multimillion-Dollar Fraud Schemes Friday, May 28, 2021 Share FacebookLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. XLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. LinkedInLinks to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. Email For Immediate Release U.S. Attorney's Office, Southern District of New York Sina Moayedi Allegedly Paid Lucrative Bribes to State Department Insider in Exchange for Confidential Bidding Information, and Fraudulently Induced State Department to Pay His Company Approximately $100 Million Audrey Strauss, the United States Attorney for the Southern District of New York, and Michael Speckhardt, the Special Agent in Charge of the U.S. Department of State, Office of Inspector General, announced the arrest today of SINA MOAYEDI, the owner of a construction company, on charges including bribery and fraud. MOAYEDI was arrested in Castleton, Virginia, and will be presented later today in the Western District of Virginia before U.S. Magistrate Judge Joel C. Hoppe. Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Sina Moayedi made misrepresentations about his employees’ qualifications and his company’s ownership in order to induce the State Department into awarding approximately $100 million in lucrative construction contracts to Moayedi’s company, Montage, Inc. Moayedi also allegedly cultivated a State Department insider, and paid the insider lucrative bribes in exchange for confidential State Department bidding information. Moayedi must now be held accountable for his alleged brazen fraud on the government.” Special Agent in Charge Michael Speckhardt said: “As alleged, the defendant’s scheme to undermine the Department’s procurement process for personal gain caught up with him today and he will now be held accountable. His alleged actions not only hurt other legitimate businesses competing for awards, but also damage the public’s trust in the effective and efficient utilization of taxpayer money.” According to allegations in the Complaint[1]: Montage, Inc. (“Montage”) is a U.S.-based business that is primarily involved in worldwide Government construction projects, including embassies, military posts, consulates, and similar overseas properties owned and operated by the United States Government. Montage has performed over $220 million in contracting work for the U.S. Government, including for the Department of Defense, the Department of Justice/Federal Bureau of Investigation, the State Department, the Department of the Interior, the Department of Agriculture, the National Aeronautics and Space Administration (“NASA”), the Equal Employment Opportunity Commission (“EEOC”), and the Department of Veterans Affairs. Since 2014, Montage appears to have focused primarily on competing for and obtaining contracts with the State Department. During that period, the State Department has awarded Montage approximately six overseas U.S. Embassy/Consulate construction project contracts totaling $100 million, in locales such as Ecuador, Spain, Sudan, the Czech Republic, and Bermuda. The founder of Montage is SINA MOAYEDI. Montage engaged in at least two fraud schemes. The first scheme alleges that, from approximately 2014 to September 2020, MOAYEDI and Montage lied that it was a female-owned business in order to secure unmerited advantages in the bidding process. By way of context, it is advantageous to a company, when bidding for federal government contracts, to be majority-owned by an individual from a socially or economically disadvantaged community. In fact, certain contracts (or portions of contracts) are “set aside” for – i.e., only available to – such companies. MOAYEDI and Montage repeatedly represented falsely in submissions to the State Department that Montage was female-owned, or female-owned and minority-owned, in order falsely to induce the State Department to award Montage lucrative construction contracts. In actuality, MOAYEDI repeatedly lied about Montage being a female-owned business, and indeed, MOAYEDI controls Montage and makes all material decisions on Montage’s behalf. As MOAYEDI revealed to a bank that inquired about Montage’s ownership status, “I am the sole owner and president of Montage and have always been.” Montage and MOAYEDI also repeatedly misrepresented, and significantly overstated, the qualifications of Montage employees. MOAYEDI made these misrepresentations in order to, among other things, meet State Department and contractual requirements for minimum experience in certain key positions. The second scheme charged in the Complaint is a bribery scheme during at least 2016 and 2017. Insider-1 is employed in the State Department’s Overseas Building Operations (“OBO”), which, according to OBO’s website, “directs the worldwide overseas building program for the Department of State and the U.S. Government community serving abroad.” Specifically, Insider-1 works for the State Department’s OBO Project Development and Coordination Division, European division. In connection with overseas construction projects, the State Department has a Technical Evaluation Panel (TEP) that considers all aspects of an offeror’s plan to execute the project. The TEP has the power to disqualify an offeror. Insider-1 oversaw the TEP for the Hamilton, Bermuda, project – a project that was awarded to Montage. In at least 2016 and 2017, MOAYEDI paid cash bribes to Insider-1 in exchange for confidential State Department bidding information relating to a particular multimillion-dollar contract in Bermuda, for which Montage was then bidding. In connection with the bidding process for the Bermuda project, Insider-1 informed MOAYEDI, in sum and substance, that: His bid was low; Montage could raise its bid by $300,000 and would still be the low bidder; and he should kick back 20 percent, or $60,000, to Insider-1 in return for this information. Shortly thereafter, Montage increased its bid by nearly $1 million. In a letter accompanying the revised bid, MOAYEDI falsely represented to the State Department that Montage’s revised bid was attributable to “an arithmetic error in our estimate worksheets.” MOAYEDI then paid Insider-1 $60,000 in cash, in three separate payments, using two men as intermediaries. * * * MOAYEDI, 66, of Chevy Chase, Maryland, is charged with one count of wire fraud, and one count of conspiracy to commit wire fraud, each of which carries a maximum potential prison sentence of 20 years, and one count of bribery of a public official, which carries a maximum potential prison sentence of 15 years. The maximum potential penalties are prescribed by Congress and are provided here for informational purposes only; any sentencing of the defendant will be determined by the judge. Ms. Strauss praised the outstanding investigative work of the State Department, Office of Inspector General, Special Agents from the United States Attorney’s Office for the Southern District of New York, and the Internal Revenue Service. She also thanked Special Agents from the United States Attorney’s Office for the District of Columbia and the Montgomery County, Maryland, Police Department. The Office’s Complex Frauds and Cybercrime Unit is handling this criminal case. Assistant U.S. Attorneys Michael D. Neff and Louis A. Pellegrino are in charge of the prosecution. [1]Links to other government and non-government sites will typically appear with the “external link” icon to indicate that you are leaving the Department of Justice website when you click the link. As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth below constitute only allegations, and every fact described should be treated as an allegation. Contact James Margolin, Nicholas Biase (212) 637-2600 Updated May 28, 2021 Topics Financial Fraud Labor & Employment Public Corruption Component USAO - New York, Southern Press Release Number: 21-124