Justice Department Targets Procurement Fraud Federal prosecutors have formed a Procurement Fraud Working Group that will include investigators embedded in contracting offices and monitoring of former Defense Department officials who go to work for contractors. Paul McNulty, the U.S. attorney for the Eastern District of Virginia, announced creation of the interagency group Feb. 18, the same day a former Boeing executive was sentenced for his part in the Darleen Druyun case. “With increased procurement, including a rise in the outsourcing of particular services, there is also a potential for an increase in procurement fraud, which includes product substitution, defective pricing or other irregularities in the pricing and formulation of contracts, misuse of classified or other sensitive information, labor mischarging, accounting fraud, fraud involving foreign military sales and ethical and conflict of interest violations,” the U.S. attorney’s office said in a statement. Members of the working group come from the FBI, Defense Department and Navy investigative services and inspectors general of the departments of Defense, Homeland Security, State and Transportation and the National Reconnaissance Office. The statement said investigators will be placed in major procurement offices “to work with agency employees who are directly involved in the negotiation of government contracts.” Investigators will also use data-mining technology to detect evidence of fraud. Pentagon investigators are looking at former DOD officials who work for contractors to see if they are involved in conflict of interest violations, Joseph A. McMillan, a special agent in the Defense Criminal Investigative Service, told The Washington Post. The stepped-up criminal enforcement efforts are the latest fallout from the confession by Darleen Druyun, former deputy acquisition chief of the Air Force, that she gave favorable treatment to Boeing in return for jobs for her daughter, son-in-law and herself. Druyun is serving a nine-month prison term. Boeing’s former chief financial officer, Michael Sears was sentenced Feb. 18 to four months in prison and a $250,000 fine. He acknowledged he negotiated Boeing’s hiring of Druyun while she was handling Boeing contracts for the Air Force. The DOD inspector general is reviewing a long list of contracts managed by Druyun. The General Accountability Office has heard several protests over awards to Boeing. (See next story.)