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About POGO's Federal Contractor Misconduct Database (FCMD)
The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations. In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data. We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »
Ranking: 57
BearingPoint Inc.
BearingPoint, formerly known as KPMG Consulting, is an international business consulting and technology systems integration firm. It provides consulting services in the areas of communications, consumer and industrial markets, financial services, high technology, and government. The company serves more than 2100 clients worldwide, including most of the major global wireless carriers, software, electronics and pharmaceutical companies, and all Cabinet-level departments of the U.S. government. BearingPoint reported over $2.7 billion in net revenue for FY 2006 and has a workforce of approximately 16,000 people in 39 countries.
Federal Contract $: $1327.4m
Total Number of Instances: 6
Total Misconduct dollar amount: $ 135.7m
Instances of Misconduct
1. Hawaiian Telcom Contract Dispute
Hawaiian Telcom hired BearingPoint in 2004 to help run customer billing systems when it took over Hawaii’s largest telephone network from Verizon. Hawaiian Telcom blamed BearingPoint for problems that arose during the changeover, such as customer complaints of long waits on help lines and double billings. In February 2007, BearingPoint agreed to pay Hawaiian Telcom $52 million and forego $29.6 million in unpaid invoices to settle the matter.... more»
2. Berman, et al. v. BearingPoint (Securities Fraud)
In August 2003, BearingPoint announced it had overstated its net income and earnings in fiscal year 2003 by $10.8 million, causing its stock value to immediately plummet. Shareholders filed a securities fraud class action against BearingPoint in federal court in the Eastern District of Virginia. The plaintiffs alleged that, during 2002 and 2003, BearingPoint disseminated false and misleading information about the company's financial status, in violation of the Securities Exchange Act of 1934. In April 2004, the court gave preliminary approval to a proposed settlement agreement for $1.7 million.... more»
3. Criminal Conspiracy
Former BearingPoint employee Larry Rodda pled guilty to one count of criminal conspiracy in connection with an alleged scheme by California software company Peregrine Systems Inc. to inflate its stock price. Peregrine overstated its revenue by $509 million from 1999 to 2001. BearingPoint was a reseller of Peregrine's software during that time. Rodda, who had been charged with signing phony contracts for Peregrine, was also named in a civil suit brought by the Securities and Exchange Commission in the matter. BearingPoint was subpoenaed in the case and has also been named in several civil lawsuits alleging that it helped Peregrine carry out its scheme. In January 2008, Rodda was sentenced to six months in prison, six months of home detention, and two years of supervised release. He was also ordered to pay a $100 special assessment. See related BearingPoint Inc. instances, “SEC v. Gardner, et al. (Aiding and Abetting Financial Fraud)” and “Aiding and Abetting Financial Fraud.”... more»
4. Travel Expense Overbilling
In December 2005, BearingPoint executed a settlement agreement with the Civil Division of the U.S. Department of Justice to settle allegations the company overbilled for travel expenses on government contracts, in violation of the False Claims Act. The company was alleged to have received secret rebates from preferred providers in the travel industry while billing the government for the full face value. Pursuant to the settlement agreement, the company paid almost $15.5 million (including attorneys' fees). The government pursued a recommendation for suspension or debarment which was denied in October 2006.... more»
5. Aiding and Abetting Financial Fraud
BearingPoint was named as a defendant in several civil lawsuits regarding certain software resale transactions with Peregrine Systems, Inc. from 1999 to 2001. Peregrine overstated its revenue by $509 million during that period, when BearingPoint was a reseller of Peregrine’s software. A former BearingPoint employee pled guilty in 2004 to signing phony contracts for Peregrine. Purchasers of Peregrine stock alleged BearingPoint participated in or aided and abetted a fraudulent scheme by Peregrine to inflate its stock price. In September 2006, BearingPoint settled the lawsuits for approximately $36.9 million. See related BearingPoint instances, "Criminal Conspiracy" and “SEC v. Gardner, et al. (Aiding and Abetting Financial Fraud)."... more»
6. SEC v. Gardner, et al. (Aiding and Abetting Financial Fraud)
The Securities and Exchange Commission filed a settled enforcement action against Larry A. Rodda, a former principal and managing director of KPMG Consulting LLC (later renamed BearingPoint Inc.) for his role in aiding and abetting a major corporate accounting fraud. Rodda was charged by the SEC in 2004 with aiding and abetting a massive financial fraud orchestrated by senior officers at Peregrine Systems, Inc., a California software company. According to the SEC, Rodda knowingly signed sham software license agreements that allowed Peregrine to inflate its stock price from fiscal year 2000 through the third quarter of fiscal year 2002. Without admitting or denying the SEC’s allegations, Rodda agreed to pay a $80,000 civil penalty. In 2004, Rodda pleaded guilty to one count of criminal conspiracy in a related criminal case. See related BearingPoint Inc. instances, “Criminal Conspiracy” and “Aiding and Abetting Financial Fraud.”... more»
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