Source: United States Attorneys General
The owner of a New York-based budget and procurement consulting company was sentenced today to six months in prison for rigging bids submitted to dozens of New York City public schools. The defendant and his company were also ordered to pay $141,511 in restitution to the victim, the New York City Department of Education (NYC DOE).
Victor A Garrido of Peekskill, New York, and his company, TranscendBS LLC, pleaded guilty on March 19 to rigging bids to NYC DOE from at least as early as November 2020 through at least as late as January 2023. In his plea agreement, Garrido also admitted to fraudulently obtaining over $20,000 in COVID-19 relief unemployment benefits and to failing to file and pay federal or state income taxes for himself or for his company for tax years 2020 to 2023.
“The Defendant stole money from public school students, and taxpayers more generally, all for his own selfish gain,” said Acting Deputy Assistant Attorney General Omeed A. Assefi of the Justice Department’s Antitrust Division. “The Antitrust Division and its PCSF partners will aggressively prosecute and hold accountable those who defraud American students and the American taxpayer.”
“Let today’s sentence be a warning to those who attempt to cheat the system. You will be held accountable,” said FBI Operations Director Chad Yarbrough of the Criminal Cyber Branch. “The FBI has zero tolerance for those who attempt to rig the system to benefit themselves, inflicting lasting harm on our communities and undermining the principles of fair competition.”
“Bid-rigging with school contracts is thoroughly unacceptable, as it deprives the school district of vital funds and students of a supportive learning environment — and it is a crime that SCI will continue to tirelessly root out,” said Special Commissioner of Investigation Anatasia Coleman of the Office of the Special Commissioner of Investigation for the NYC School District. “SCI is grateful for its continued partnership with the DOJ Antitrust Division and the FBI in bringing this case to justice.”
“Victor Garrido defrauded the New York State Department of Labor by illegally obtaining pandemic-related unemployment insurance benefits. This sentencing underscores the U.S. Department of Labor, Office of Inspector General’s unwavering commitment to safeguard the American workplace from fraud and corruption,” said Special Agent in Charge Jonathan Mellone of the U.S. Department of Labor, Office of Inspector General Northeast Region. “We will continue to work closely with our law enforcement partners to hold accountable those who engage in these criminal activities within our jurisdiction”
According to court documents, Garrido was previously employed by NYC DOE as a business manager where he provided budget and procurement guidance and training to various schools. Shortly after leaving that role, Garrido formed TranscendBS to provide similar services as a consultant to New York City public schools. During the scheme, Garrido, TranscendBS, and their co-conspirators submitted fake, artificially high “competitor” bids to make it appear as if TranscendBS was the lowest bidder for dozens of business consulting services contracts. None of the “competing” bidders actually provided these services. In addition to thwarting NYC DOE’s procurement rules to ensure that TranscendBS obtained the contracts, Garrido priced his services to just under the threshold which would have required additional scrutiny.
The scheme impacted approximately 28 New York City public schools, predominantly in low-income communities. TranscendBS won at least $707,555 in contracts from those schools, resulting in estimated losses to NYC DOE of $141,511.
In connection with his unemployment benefit fraud, Garrido was also ordered to pay $23,100 in restitution to the New York State Department of Labor.
The Antitrust Division’s New York Office prosecuted the case, which was investigated with the assistance of the Special Commissioner of Investigation for the New York City School District, the Federal Bureau of Investigation, and the Office of Inspector General for the U.S. Department of Labor. Trial Attorneys Helen Christodoulou, Kathryn Carpenter, and Maia Lichtenstein are prosecuting the case.
In November 2019, the Justice Department created the Procurement Collusion Strike Force (PCSF), a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant and program funding at all levels of government—federal, state and local. To learn more about the PCSF, or to report information on bid rigging, price fixing, market allocation and other anticompetitive conduct related to government spending, go to www.justice.gov/procurement-collusion-strike-force. Anyone with information in connection with this investigation can contact the PCSF at the link listed above.