Impact of Kickbacks and Bid Rigging in the Construction Industry

School: Southern New Hampshire University - Course: ACC 421 - Subject: Accounting

1 Acc- 421 Module Five Short Paper Kickbacks and Bid Rigging Southern New Hampshire University Lisa L. Stiles March 30, 2023

Between October 2011 to late March 2018 Gary DeVoe committed rig bids and fraud on contracts in conjunction with insulation installing.Mr. DeVoe conspired with other contractors to rig the bids for installation contracts in the states of Connecticut, New York, and Massachusetts. These individuals including Mr. DeVoe according to the Department of Justice cooked up collusive bids, shared bid numbers with their competitors and communicated with co- conspirators via encrypted messaging apps, all in an effort to line their own pockets and their companies' bottom lines. (DOJ 8 April 2019).Mr. DeVoe and his associates rigged bids on 45 million dollars in insulation jobs throughout New England and bordering states.Businesses that were affected by these inflated rig bid include, hospitals, universities, public building, and private residences. This country is built on the idea of capitalism and a free market economy.Consumers have the right to research and claim the best bid that works for them.When individuals conspire to commit collusion and rig bids, they are taking away consumers right to receive the best quality of a job they are entitled to, while these contractors line their own pockets.Having an accounting system in place I do not feel could help stop this scheme from happening. These schemes take away the right of the benefits of competitive contracts, which affects funding that is paid by everyday taxpayers. Restrictions of these actions are put in place to hold construction companies to a standard where there is an equal paying field to bid on fair contracts to all parties involved.This scheme is so subtle that with all the individuals involved it would be difficult to see the inflating of the bids right away. Why is this page out of focus?

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3 Mr. DeVoe pleaded guilty to his role in the scheme to rig bids and commit fraud.The charges carry maximum penalties of up to 10 years in prison with a $1 million dollar fine for the antitrust charge.The fraud conspiracy carries a penalty of up to 20 years in prison and a $250,000 fine.Mr. DeVoe was also ordered to pay restitution to the victims and agreed to forfeiting his home for $131,000.This is a fraud that is so hard to catch right away, with the amount of individuals needed to execute it, and with all working for different companies it is hard to tell right away that they are purposely running up bids for kickbacks to themselves.