Alaska company to pay Justice Department $1.3M in fraud case

ANCHORAGE, Alaska (AP) — A subsidiary of an Alaska Native corporation has agreed to pay $1.3 million in a deal with the U.S. Department of Justice over a fraud scheme allegedly involving a former employee.

Manufacturing company Alutiiq International Solutions told the agency in a non-prosecution deal that former manager Elmer Baker received cash and other kickbacks over several years in connection with a project to modernize the Harry S. Truman Federal Building in Washington, D.C., the Anchorage Daily News reported.

Alutiiq International Solutions performs construction work on government contracts and initially received a $12.3 million contract in 2008 to modernize the building. Contract modifications increased it to $20 million, the department said.

The Justice Department also said Baker allegedly billed U.S. General Services Administration improperly for services provided by an on-site superintendent, who was not actually on site.

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General Services Administration paid Alutiiq International Solutions more than $1 million in fraudulent billing and inflated contract modifications.

“From the moment we first learned of the investigation, we cooperated fully and completely with DOJ,” parent company Afognak Native Corp. said, adding that they were unaware of mismanagement until 2017. “Since learning of the investigation, we have further enhanced our compliance program and taken numerous steps to ensure employees understand and adhere to our expectations.”

A federal grand jury indicted Baker last year on charges of wire fraud and conspiracy to violate the Anti-Kickback Act. He is scheduled to go to trial Dec. 7 before U.S. District Court Judge Amy Berman Jackson.

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