Defendants Blanchet and Guillan procured the $100 million, small business set-aside contract with the federal government. The contract was for the provision of foreign language instruction services to the United States Special Operations Command (“SOCOM”). The core of the fraud in this case was that their company did not meet the necessary federal standards to be considered a small business. Both Defendants misrepresented facts about their company and concealed material facts about their company’s affiliation with another, larger company. It was the case both in the initial bid and during the government’s later investigation.
The US Court of Appeals affirmed convictions and sentences of the initial trial court.
According to 18 U.S.C.S. § 371, conspiracy takes place when (1) there exists an agreement between two or more persons to commit a crime; (2) conspirators knowingly and willfully joined or participated in the conspiracy; and (3) they performed an overt act in furtherance of the agreement. The existence of a conspiracy may be proven by circumstantial evidence, i.e. inferences from the conduct of suspects or from circumstantial evidence of the scheme of conspiracy.
The elements of mail and wire fraud are: (1) intentional participation in a scheme to defraud, and, (2) the use of the interstate mails or wires in furtherance of that scheme. However, scheme of conspiracy to commit fraudulent acts must be alleged in existence of material misrepresentation as well as the intentional omission or concealment of a material fact calculated to deceive another out of money or property. A misrepresentation is material if it has a natural tendency to influence, or is capable of influencing, the decision maker to whom it is addressed.
Whether trial court judged correctly on one count of conspiracy to defraud the US in violation of 18 U.S.C.S. § 371, as well as five counts of wire fraud in violation of 18 U.S.C.S. §§ 1343 and 2.
The appellate court upheld the verdict that defendants willfully and maliciously defrauded in order to obtain a small business set-aside contract with the federal government. It was admitted that the company’s affiliation with another larger company was concealed through misrepresentation. Hence, the appellate court was convinced that delinquents consciously and knowingly sent and received the proceeds from their illicitly-obtained contract over the interstate wires. The court also did accept that “district court did not abuse its discretion in permitting a government lay witness to testify without being qualified as an expert”.