Texas Man Pleads Guilty to Rigging Bids for Healthcare-Related U.S. Air Force Projects

The owner of a storage sales company pleaded guilty to two felony counts for conspiring to rig bids and defraud the U.S. Department of War in connection with the sale of shelving and storage products to the U.S. Air Force to service multiple healthcare facilities, according to the Justice Department’s Antitrust Division. According to the information and plea agreement filed in the U.S. District Court for the Middle District of Georgia, Eric J. Caddy, 62, of Huntington, Texas, and his co-conspirators submitted collusive bids for multiple healthcare-related projects at Air Force Base Moody in Valdosta, Georgia, including: (1) the Medical Logistics Warehouse Project; (2) the Pharmacy Modernization and Renovation Project; (3) the Veterinary Clinic Project; and (4) the Dental Lab Clinic Project. One of Caddy’s co-conspirators instructed Caddy to submit intentionally higher prices for the projects and even provided Caddy with the specific pricing to include on bids for the projects. Caddy then submitted the collusive bids to a prime vendor for the federal government, which in turn submitted the collusive bids to the U.S. Department of War. Caddy and his co-conspirators concealed the bid rigging from the government by having Caddy “re-write” certain bid forms “in [Caddy’s] own handwriting” before transmitting them. The projects, which totaled over $1.6 million, were funded through the Defense Logistics Agency’s Facilities Maintenance, Repair, and Operations Program. The guilty plea is the first in an ongoing investigation into bid rigging and fraud impacting U.S. military facilities in the United States. “Defending free and fair competition in healthcare spending is a critical priority for the Antitrust Division, particularly when it affects the U.S. military,” said Acting Deputy Assistant Attorney General Daniel Glad of the Justice Department’s Antitrust Division. “The Antitrust Division’s Procurement Collusion Strike Force and its partners will continue to find and prosecute those who corrupt the competitive process and increase healthcare-related costs in the United States.” The maximum penalty for a conspiracy to rig bids in violation of the Sherman Act for an individual is 10 years in prison and a $1 million criminal fine. The maximum penalty for conspiracy to defraud the United States is five years in prison and a $250,000 criminal fine. The fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fine. Caddy is scheduled to be sentenced on June 25.