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So your probably staring at this Civil Investigative Demand about defense contracting fraud and your entire livelihood is about to vanish. Maybe DCAA found cost mischarging during an audit. Maybe you failed cybersecurity requirements under DFARS. Or maybe your just caught up in there latest crackdown on defense contractors. Look, we get it. Your ABSOLUTELY HORRIFIED. And you should be! Because defense contractor fraud cases routinely result in MILLIONS in penalties plus suspension and debarment that destroys your business forever!
Let me explain the national security nightmare your facing. DOJ’s Civil Cyber-Fraud Initiative specifically targets defense contractors for any cybersecurity or compliance failures!
Defense contracting isn’t like regular government work – the rules are impossibly complex! DFARS has thousands of clauses, Cost Accounting Standards that nobody fully understands, cybersecurity requirements that change monthly, ITAR restrictions that criminalize basic communications! We’ve seen contractors destroyed for violations of regulations they didn’t even know existed!
Here’s what’s terrifying – DFARS 252.204-7012 requires 110 different cybersecurity controls! Miss ONE and your facing False Claims Act liability for every invoice you’ve ever submitted! One contractor reported a cybersecurity score of 104 out of 110, but an audit showed it was actually NEGATIVE 142! They paid millions!
Hold onto your security clearance because these numbers will end your career! Defense contractor violations trigger multiple penalty streams that compound into bankruptcy:
False Claims Act treble damages mean paying back THREE TIMES every dollar received! Had a $50 million contract? That’s $150 million in damages! Plus civil penalties up to $28,000 per invoice! Submitted 5,000 invoices over five years? That’s another $140 MILLION in penalties!
DCAA examined $599 billion in contract costs in 2024 and found $5.1 billion in questioned costs! But here’s what’s worse – criminal charges! Defense Procurement Fraud carries 10 years prison! Major Fraud Act adds 10 more years! Plus wire fraud, conspiracy, false statements – executives face 30+ years for defense contracting violations!
Your probably wondering “How did DOD find out?” Let me tell you what destroys defense contractors:
DCAA audits are the deadliest trigger! Incurred cost audits, forward pricing audits, CAS compliance audits – any deficiency becomes potential fraud! That minor timekeeping error from 2019? Now it’s criminal cost mischarging!
Cybersecurity assessments by DIBCAC uncover DFARS violations. Failed one security control? Every invoice since becomes a false claim! Whistleblowers with security clearances know exactly what violations to report. Competitors file qui tam lawsuits claiming you don’t meet contract requirements. Even routine DCIS investigations expand into full-blown fraud cases!
This is where defense contractors get DESTROYED! DFARS cybersecurity requirements are impossibly complex and constantly changing!
You must implement all 110 NIST 800-171 controls or have a “Plan of Action and Milestones” (POAM). But POAMs are traps! Saying you’ll fix something later becomes admission you’re currently non-compliant! Every invoice submitted while non-compliant = FALSE CLAIM!
The Cybersecurity Maturity Model Certification (CMMC) makes it worse! Soon you’ll need third-party certification just to bid! Can’t afford the $100,000+ certification cost? Your out of defense contracting forever! Failed one control during assessment? Potential False Claims Act liability for EVERYTHING!
ABSOLUTELY! And it happens ALL THE TIME! DOJ aggressively pursues criminal charges against defense contractors!
DCAA refers cases to Defense Criminal Investigative Service (DCIS) who work with FBI and DOJ. What starts as routine audit becomes criminal investigation overnight! We’ve seen executives arrested based on DCAA findings from audits they thought were closed years ago!
Cost mischarging between contracts? Major Fraud Act violation! Defective pricing on sole-source contracts? Criminal false statements! Time card errors by employees? Wire fraud conspiracy! One contractor’s project manager charged wrong contract code – the CEO went to federal prison for 7 years!
This is the DEATH SENTENCE for defense contractors! Suspension and debarment destroy contractors permanently!
The moment CID is issued, your essentially blacklisted! Contracting officers won’t exercise options. New contracts disappear. Existing contracts get terminated for convenience. Security clearances get suspended. Facility clearances revoked. Your entire workforce becomes unemployable in defense industry!
Debarment isn’t just you – its your affiliates, subsidiaries, key employees, even family members! We’ve seen third-generation family defense businesses destroyed because one executive made accounting errors. The family name becomes toxic in defense contracting FOREVER!
The scope is absolutely crushing! DOD demands access to EVERYTHING:
All cost accounting records and timekeeping systems, every email about any contract, DCAA audit responses from past decade, cybersecurity assessments and POAMs, subcontractor agreements and flowdowns, employee security clearance documents, export control compliance records!
But here’s what’s impossible – they demand proof of compliance with every DFARS clause ever! How do you prove you’ve never violated ITAR? How do you show perfect cybersecurity for five years? Its designed to be impossible so they can claim obstruction when you can’t produce fantasy documents!
CAS violations are particularly devastating for defense contractors! DCAA ruthlessly enforces Cost Accounting Standards!
Changed your accounting system? CAS violation! Allocated costs differently than five years ago? CAS VIOLATION! Used new methodology for overhead rates? MASSIVE CAS VIOLATION! We’ve seen contractors pay $20 million penalties for accounting changes they thought improved accuracy!
The worst part – CAS violations are strict liability! Doesn’t matter if changes were reasonable, approved by your auditor, or even required by GAAP! If DCAA says you violated CAS, you pay millions and potentially face criminal charges for false claims on every affected contract!
Prepare for YEARS of agony while your business slowly dies! Defense contractor investigations are extraordinarily complex:
Initial CID response and document production (90-120 days), DCAA forensic audit of all contracts (12-18 months), DCIS criminal investigation running parallel (18-24 months), coordination with multiple agencies (ongoing throughout), DOJ prosecution decision (6-12 months), trial or settlement negotiations (12-24 months)!
Your looking at 4-6 YEARS minimum! During this time, no new contracts, existing contracts under scrutiny, employees leaving for competitors, bonding capacity destroyed, and legal fees exceeding $5-10 MILLION! We’ve seen billion-dollar defense contractors become penny stocks during investigations!
This adds another layer of terror! ITAR violations compound defense contracting fraud!
Shared technical data with foreign national employee? ITAR violation AND false claims on every contract! Sent unclassified email to overseas subsidiary? Criminal export violation! Even showing PowerPoint to visiting allied military officers can trigger prosecution!
State Department imposes separate civil penalties up to $1 million per violation! Plus DOJ criminal prosecution adding 20 years prison for Arms Export Control Act violations! We had client prosecuted for ITAR violation because there janitor was a green card holder who emptied trash containing technical drawings!
This is the cruelest trap in defense contracting! Mandatory disclosure rules require reporting but reporting triggers destruction!
FAR 52.203-13 requires disclosing credible evidence of violations or face suspension/debarment! But disclosing triggers False Claims Act lawsuit! Its literally “report and be destroyed” or “don’t report and be destroyed worse”!
Even voluntary disclosure to get “credit” is a trap! DOJ still pursues massive penalties, just slightly reduced. Companies that self-report still pay hundreds of millions, still get suspended, executives still imprisoned! One contractor self-reported minor TINA violation – paid $45 million and CEO got 3 years prison!
Look, we’re not your typical government contracts lawyers who just file bid protests. We’re criminal defense attorneys who specialize in keeping defense contractors operational when investigations threaten there existence.
We understand DCAA audit procedures and how to challenge there conclusions. We know DFARS requirements and can demonstrate substantial compliance even with technical violations. We can navigate classification issues that complicate defense in national security cases. Most importantly, we prevent civil investigations from becoming criminal prosecutions!
Other firms tell you to cooperate fully and trust the process. That’s EXACTLY how defense contractors get destroyed! DOD doesn’t care about your service to the country – they want headlines and massive penalties. We fight strategically, protecting your clearances while forcing government to prove intentional fraud!
Call us RIGHT NOW at 212-300-5196
Defense contractor CIDs destroy businesses overnight!
Security clearance lawyers – Former DOD officials – Available 24/7!
Don’t wait another second! Defense contractor investigations move at warp speed once triggered. DCAA is reviewing every invoice. DCIS is interviewing employees. DOJ is preparing indictments. Your competitors are already positioning to take your contracts!
Remember – defense contracting violations aren’t just about money, there about national security. The government shows NO MERCY to contractors they claim compromised defense capabilities. You need someone who understands the unique complexity of defense contracting AND criminal defense. Call us NOW before that CID becomes a criminal indictment!
Very diligent, organized associates; got my case dismissed. Hard working attorneys who can put up with your anxiousness. I was accused of robbing a gemstone dealer. Definitely A law group that lays out all possible options and best alternative routes. Recommended for sure.
- ROBIN, GUN CHARGES ROBIN
NJ CRIMINAL DEFENSE ATTORNEYS