caddell npa.pdf

7/30/2019 Caddell NPA.pdf

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the Company sells, merges, or transfers all or substantially all of its business operations as they

exist as of the date of this Agreement, whether such sale(s) is/are structured as a stock or assetsale, merger, or transfer, the Company shall include in any contract for sale, merger, or transfer aprovision fully binding the purchaser(s) or any in interest thereto to the obligationsdescribed in this Agreement.

This Agreement shall have a term of (2) years from the date that this Agreement isexecuted, except as specifically provided i n the following paragraph. It is understood that for thetwo-year term of this Agreement, the Company shall: (a) commit no U.S. crime; (b) truthfullyand completely disclose non-privileged information with respect to the activities of theCompany, its officers, directors, employees, and others concerning all matters about which theDepartment inquires of it, which information can be used for any purpose, except as otherwiselimited in this Agreement; and (c) bring to the Department's attention all conduct by, or criminalinvestigations of, the Company, any of its employees, relat ing to U.S. crimes that come to the

attention of the Company's senior management, as well as any administrative proceeding or civilaction brought by any governmental authority that alleges fraud or corruption by or against theCompany.

Until the date upon which all investigations and any prosecution arising out of theconduct described in this Agreement are concluded, whether or not they are concluded within thetwo-year term of this the Company shall, with respect to these matters and subject toapplicable laws or regulations: (a) cooperate fully with the Department and any law enforcementagency designated by the Department; (b) assist the Department in any investigation orprosecution by providing logistical and technical support for any meeting, interview, grand juryproceeding, or any trial or other court proceeding; (c) use its best efforts promptly to secure theattendance and truthful statements or testimony of any officer, director, agent, or employee of theCompany at any meeting or interview or before the grand jury or at any trial or other courtproceeding; and (d) provide the Department, upon all non-privileged information,documents, records, or other tangible evidence about which the Department or any designatedlaw enforcement agency inquires.

It is understood that, i f the Department in its sole discretion determines that the Companyhas committed any U.S. crime after signing this Agreement, that the Company has deliberatelygiven false, incomplete, or misleading testimony or information at any time, or the Companyotherwise has violated any provision of this Agreement, the Company shall thereafter be subjectto prosecution for any violation of federal law of which the Department hasincluding perjury and obstruction of justice. Any such prosecution that is not time-barred by theapplicable statute of limitations on the date that this Agreement is executed may be commencedagainst the Company, notwithstanding the expiration of the statute of limitations during the termof this Agreement plus one year. Thus, by signing this agreement, the Company agrees that thestatute of limitations with respect to any prosecution that is not time-barred as of the date thisAgreement is executed shall be tolled for the term of this Agreement plus one year.

It is understood that, i f the Department in its sole discretion determines that the Companyhas committed any U.S. crime after signing this Agreement, that the Company has given false,incomplete, or misleading testimony or information, or that the Company otherwise has violated


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any provision of this Agreement: (a) all statements made by the Company to the Department or

other designated law enforcement agents, including Appendix A hereto, and any testimony givenby the Company before a grand jury or other tribunal, whether before or after the execution of this Agreement, and any leads from such statements or testimony, shall be admissible inevidence in any criminal proceeding brought against the Company; and (b) the Company shallassert no claim under the United States Constitution, any statute, Rule o f the Federal Rulesof Evidence, or any other federal rule that such statements or any leads therefrom areinadmissible or should be suppressed. By signing this Agreement, the Company waives allrights in the foregoing respects.

In the event that the Department determines that the Company has breached thisAgreement, the Department agrees to provide the Company with written notice o f such breachprior to instituting any prosecution resulting from such breach. The Company shall, within thirty(30) days of receipt o f such notice, the opportunity to respond to the Department in writing

to expla in the nature and circumstances of such breach, as well as the actions the Company hastaken to address and remediate the situation, which explanation the Department shall consider indetermining whether to institute a prosecution.

It is understood that the Company has agreed to pay a monetary penalty o f $2 million.The Company agrees to pay this sum to the United States Treasury within ten days of executingthis Agreement. The Company acknowledges that no tax deduction may be sought i n connectionwith this payment.

It is further understood that this Agreement does not bind any federal, state, local, orforeign prosecuting authority other than the Department. The Department will, however, bringthe cooperation o f the Company to the attention of other prosecuting and investigative offices, i f requested by the Company.

It is further understood that the Company and the Department may disclose thisAgreement to the public.

With respect to this matter, from the date o f execution o f this Agreement forward, thisAgreement supersedes all prior, i f any, understandings, promises and/or conditions between theDepartment and the Company. No additional promises, agreements, or conditions have beenentered into other than those set forth in this Agreement and none wil l be entered into unless inwriting and signed by all parties.

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Sincerely,

DENIS J. McINERNEYChief, Fraud Section

Date: BY:' ' B. Jr. 1 "

Assistant Chief

Thomas

Trial Attorney

AGREED AN D CONSENTED TO:

CADDELL CONSTRUCTION CO.,

Date: BY:

A. CaddellChairman of the BoardCaddell Construction Co., Inc.

Date: BY:Stephen R, Spivack Bradley Arant Boult Cummings LLPCounsel to Caddell Construction Co.,

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federal government contracts, and commercial contracts. Two such programs were the Mentor-

Program and the Indian Incentive Program.

g. The Program provided incentives for major Defense Departmentcontractors ("mentor firms") to contract with and help develop disadvantaged small businessconcerns firms"). Under the Program, the Defense Departmentreimbursed the mentor firm fo r costs the mentor incurred providing developmentalassistance to its protege" firm. In addit ion to the requests sent to the Defense Department by thementor for reimbursement of those costs, the mentor was required to reportsemiannually on the progress made under the mentor-protege agreement and, among otherthings, describe the developmental assistance it had provided to the protege firm, the number of employees working for the and the firm's gross revenue.

h. The Indian Incentive Program was designed to provide incentives to primegovernment contractors to use Indian-owned businesses as subcontractors, to maximize theopportunity for such businesses to participate in perfo rming contracts awarded by federalagencies. Under the Indian Incentive Program, the Defense Department paid prime contractors

percent (5%) of the amount those prime contractors paid to an Indian-owned subcontractorperforming a subcontract on a Defense Department contract.

The Company's Participation in the Program with Mountain Chief

2. In or about February 2003, the Company entered into a agreement ("theagreement") with Mountain Chief. The agreement outlined specific areas of developmentalassistance that the Company would provide to Mountain Chief in connection with two contractswhich the Company had been awarded by the Defense Department for construction projects atFort Bragg, North Carolin a ("the Fort Bragg contracts"). Each of the For t Bragg contracts had avalue of more than $65 million. The Company submitted the agreement to the DefenseDepartment, and the Defense Department approved the Company's participation in the Mentor-

Program.

3. Pursuant to the agreement, from in or about February 2004 through in or about March2005, the Company submitted in excess of 20 requests to the Defense Department seekingpayments under the Fort Bragg contracts. As Hill and other Company executives at theCompany knew, those requests claimed, among other things, that the Company had incurredcosts that were eligible fo r reimbursement under the Program, that is, costs fo rproviding developmental assistance to Mountain Chief. Specifically , the requests includedindividual and summary for certain employees o f the Company, purport ing to showthe hours those employees spent providing a variety of types of developmental assistance toMountain Chief. In fact, as Hill and Company Executive A knew, the payment requestssignificantly overstated the amount o f developmental assistance that the Company had provided

to Mountain Chief.

4. From in or about February 2004 through in or about March 2005, the Company alsosubmitted documents reporting on Mountain development as a protege company ("the

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Reports") to the Defense Department. and other Company executives knew

that Mountain Chief was a small company with few employees. Nevertheless, the Semi-AnnualReports falsely claimed that Mountain Chief had over 40 employees and over $ inannual gross revenues, despite the fact that, as Hill and Executive A knew, Mountain Chief didnot have over 40 employees and over $18,000,000 in annual gross revenues. In addition, theSemi-Annual Reports falsely claimed that Mountain Chief had realized or was in the process of achieving certain technical capabilities and business infrastructure. fact, as Hill and CompanyExecutive A knew, Mountain Chief neither achieved nor was in the process of achieving thecapabilities or infrastructure identified in the Semi-Annual Reports.

5. or about January an official from the Defense Department's Army Office of Small Business Programs ("the Official") contacted the Company with questions about theinformation the Company reported to the Defense Department pursuant to theProgram. Hill returned the Official's call and answered the Official's questions about the

between the Company and Mountain Chief and certain representations that appearedin the Semi-Annual Reports. During the Hill told the Official that to the best of hisknowledge, Mountain Chief had received the ful l amount of training in the technology areaslisted in the Semi-Annual Reports. As Hill knew, however, Mountain Chief had not received thefull amount of the training represented in the Semi-Annual Reports.

The Company's Participation in the Indian Incentive Program with Mountain Chief

6. From in or about April 2003 through in or about October 2004, the Company submittedat least eight requests to the Defense Department for Indian Program payments inconnection with the two Fort Bragg contracts, as well as with a third Defense Departmentcontract awarded to the Company at Fort Campbell, Kentucky, which had a value of approximately $34 million.

7. In these payment requests and in other oral representations, as Hil l and at least one otherCompany executive kn ew, the Company represented to the Defense Department that MountainChief had performed on its subcontracts, and provided the Defense Department with evidence of that performance in the form of invoices from Mountain Chief "for services rendered" over aspecified time period. As Hil l and Company Executive A knew, however, Mountain Chief performed few , i f any "services" fo r Caddell, and the invoices were created solely to supportCaddell 's applications for payments under the Indian Incentive Program.

8. Company obtained approximately $ million from the United States under theMentor-Protege" and Indian Incentive Programs.

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caddell npa.pdf

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