A subsidiary of Afognak Native Corporation has agreed to pay over $1.25 million in victim compensation to the General Services Administration after an investigation revealed a fraud in the company. 

The U.S. Justice Department’s investigation revealed that Elmer Baker, a project manager at Alutiiq International Solutions LLC, a subsidiary of the native corporation that performs construction work on government contracts, perpetrated a kickback and fraud scheme. 

A news release published by the department said that as part of a non-prosecution agreement, the subsidiary has agreed to pay $1,259,444 in victim compensation to the GSA. 

Beginning around June 2010, Baker was assigned to a multimillion-dollar GSA contract to modernize the Harry S. Truman Federal Building in Washington, D.C.. 

The press release said that Baker began receiving kickbacks from a subcontractor on the project in exchange for steering work to the subcontractor.  

These kickbacks initially were paid in the form of meals, vacations and other things of value but, by 2015, the AIS project manager began demanding cash kickbacks equivalent to 10% of the value of contract modifications that were being awarded to the subcontractor.  

At the same time, Baker billed the GSA for services purportedly provided by an on-site superintendent when there was no superintendent on site.  

The false and fraudulent billings caused the GSA to pay more than $500,000 to AIS that it should not have paid, said the press release. Additionally, when making contract modification requests to the GSA, the project manager illegally inflated the estimated costs that AIS received from its subcontractor. 

A federal grand jury in the District of Columbia charged Baker with conspiracy to violate the Anti-Kickback Act, as well as four counts of wire fraud, in May 2019.  

The trial is currently scheduled for Dec. 7 before the U.S. District Court Judge Amy Berman Jackson. 

“From the moment we first learned of the investigation, we cooperated fully and completely with DOJ.  We are grateful that the NPA acknowledges our full and complete cooperation and provides credit for that cooperation,” Alisha Drabek, executive vice president of the Afognak Native Corporation, said in a statement. 

“In addition, we have long maintained a robust compliance program with written standards of conduct and internal controls,” she said. “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. DOJ credited us for our ‘extensive remedial measures’ in the NPA.”

The GSA Office of Inspector General, FBI’s Washington Field Office, and the State Department’s Office of Inspector General are investigating this case.  

Trial Attorney Vasanth Sridharan of the Criminal Division’s Fraud Section is prosecuting the case. The Army Criminal Investigation Division and the FBI’s Atlanta Field Office provided assistance in connection with the case.

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