IRS accused of granting $500 mln in suspicious contracts
Published time: June 26, 2013 16:47
A Virginia IT company inappropriately secured $500 million worth of IRS contracts based on false statements and ties to an agency official, according to a congressional staff report released on Tuesday.
The House Oversight and Government Reform Committee released a report accusing an Internal Revenue Service employee of procuring inappropriate contracts for a small business called Strong Castle, which was founded in 2011 by a man named Braulio Castillo.
In 2012, Castillo received more than $500 million in IRS awards for his technology firm and a mere $465,780 from other federal government agencies. The report accuses IRS deputy director Greg Roseman, a close friend of Castillo’s, of “influencing the selection process” to benefit his friend.
“The IRS – where Strong Castle received well over 99 percent of its 2012 revenues – employs Castillo’s long-time friend, Greg Roseman, who oversaw each and every contract awarded to Strong Castle by the IRS in 2012,” the report’s authors wrote.
The congressional committee also found that before launching the IT company, Castillo filed for “disability rating” with the Veterans Administration, claiming he suffered from a foot injury he obtained at a military prep school in 1984. The rating qualified Strong Castle as a “service-disabled, veteran-owned small business,” which gave it preferential treatment in bidding competitions. But Castillo never served on active duty, and played college sports after the alleged injury.
“The case of Strong Castle and its cozy relationship with the IRS is but one example of a deeply flawed procurement process in the federal government,” the report says.