Former DOT Contractor and Co-defendant Plead Guilty in Scheme to Defraud Cost Factoring Companies of Over $1 Million Dollars
On February 24, 2010, Rafael Simmons pled guilty in U.S. District Court in Greenbelt, Maryland, to wire fraud and money laundering in connection with a scheme to defraud accounts receivables companies, known as factoring companies, of more than $1 million. According to their plea agreements, from November 2007 through July 2009, Mr. Simmons, Mr. Mathis and others engaged in a scheme to defraud factoring companies, which purchase account receivables from federal government contractors and others. Mr. Simmons contacted Federal National Payables (FNP), a factoring company, acting as the Director of Omega Rho International (ORI), a management consultant company located in Odenton, Maryland, and falsely represented that ORI had a lucrative contract to supply telecommunications services to the U.S. government.
Mr. Simmons represented to FNP that ORI was willing to assign its rights to payments under the contract to FNP, in exchange for advances on those payments. Mr. Mathis falsely represented himself as a Contracting Officer for the U.S. Army, through a series of emails and phone calls using his Department of Transportation (DOT) computer in order to convince FNP that ORI had a genuine government contract and those government payments would be made to FNP. The total loss resulting from the scheme was between $1 million and $2.5 million. Co-defendant Rodney Mathis, former DOT contractor, pled guilty on February 22, 2010 to wire fraud in connection with his role in the scheme. Both are scheduled for sentencing on May 17, 2010.
The OIG investigation is being conducted jointly with the Federal Bureau of Investigation, Internal Revenue Service, Criminal Investigative Division and the Defense Criminal Investigative Service.