VIHFA’s Lack of Due Diligence Raises Red Flags in Federal Contract

A federal investigation has uncovered serious concerns regarding VIHFA’s failure to verify the SAM registration and DUNS account number of IDRG, ultimately leading to the company being ineligible for a federal contract. The investigation also revealed evidence of fraud, including altered bid proposals and misuse of funds.

Lack of Due Diligence Exposed

According to court documents, in June 2020, VIHFA’s Chief Operating Officer (COO) Darin Richardson convened a Bid Evaluation Committee meeting to review bids from ISG and IDRG for a storage and management contract worth $2.993 million. However, Richardson failed to properly evaluate the bids, violating federal regulations by performing both roles.

• The investigation found that IDRG’s bid proposal was altered by unknown co-conspirators after it was submitted to VIHFA, making its bid less competitive than those of ISG and D&S Trucking.
• Despite this, Richardson awarded the contract to ISG and D&S Trucking on January 27, 2021.

Fraudulent Activities Uncovered

The investigation also revealed that Charlemagne, in his capacity as Director of ISG, received a payment from the company in February 2022, despite being instrumental in reviewing and awarding the woodpile contract. Richardson, who was COO at the time, falsely stated that he had recused himself from all VIHFA matters related to ISG.

Indictment Charges

The indictment charges Charlemagne and Richardson with theft of HUD disaster relief program funds meant for low-income families affected by Hurricanes Irma and Maria in September 2017.

Public Reminded: An Indictment is Not Evidence of Guilt

U.S. Attorney Smith reminds the public that an indictment is merely a formal charging document and is not evidence of guilt. Every defendant is presumed innocent until proven guilty beyond a reasonable doubt.

Ongoing Investigation

The case highlights the importance of proper due diligence in government contracting, particularly in situations where taxpayer dollars are at stake. The investigation is ongoing, and further charges may be forthcoming.

“We take allegations of illegally obtained taxpayer dollars through fraudulent schemes very seriously,” said HUD OIG Southeast Region Acting Special Agent-In-Charge George Richardson. “We will continue to work with our law enforcement partners to protect the integrity of HUD’s programs and ensure vulnerable people in our communities receive critical resources.”

The FBI and SBA OIG are also investigating the case, which is being prosecuted by Assistant United States Attorney Evan Rikhye.