United States v. Intelligent Fiscal Optimal Sols.

• Decision Date: 28 September 2022
• Docket Number: CIVIL 1-22-cv-01053-JMC
• Parties: UNITED STATES OF AMERICA, Plaintiff, v. INTELLIGENT FISCAL OPTIMAL SOLUTIONS, LLC aka iFOS, et al, Defendants.
• Court: U.S. District Court — District of Maryland

UNITED STATES OF AMERICA, Plaintiff,
v.
INTELLIGENT FISCAL OPTIMAL SOLUTIONS, LLC aka iFOS, et al, Defendants.

CIVIL No. 1-22-cv-01053-JMC

United States District Court, D. Maryland

September 28, 2022

MEMORANDUM OPINION

J. Mark Coulson United States Magistrate Judge

Plaintiff United States of America brings this False Claims Act (“FCA”), breach of contract, payment by mistake, and unjust enrichment action against Defendants Intelligent Fiscal Optimal Solution, LLC (“iFOS”) and Tawanda Smith seeking damages, treble damages, civil penalties, and the amount paid under the relevant contract in compensation for harm caused by Defendants' alleged actions pertaining to iFOS' acquisition of a Department of Homeland Security (“DHS”) contract. (ECF No. 1). In addition to Defendants' Motion to Dismiss or for Summary Judgment (ECF No. 13), this Court has considered Plaintiff's Opposition to the Defendants' Motion to Dismiss or for Summary Judgement (ECF No. 28), and Defendants' Reply Memorandum to Plaintiff's Opposition to Motion to Dismiss or for Summary Judgement (ECF No. 31). No hearing is necessary. See Loc. R. 105.6. (D. Md. 2021). For the reasons explained below, Defendants' Motion, treated as a motion to dismiss, is DENIED.

I. BACKGROUND

The following facts are uncontroverted or set forth in the light most favorable to Plaintiff. Defendant iFOS is a limited liability company that was incorporated by Tawanda Smith on or

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about April 3, 2009.^[1] (ECF No. 1 at ¶ 8). In November and December of 2015, Ms. Smith and others spoke with Dr. Kenneth Buck about potential business opportunities while Dr. Buck was still employed by the DHS. Id. at ¶ 17. Prior to leaving DHS, Dr. Buck helped prepare a “Statement of Work,” also known as a “Requirements Statement,” for the DHS contract that was ultimately obtained by iFOS and is the subject of this entire claim. Id. at ¶ 22. Prior to Dr. Buck's retirement from DHS on January 8, 2016, Dr. Buck spoke with the Deputy Director and informed her that Dr. Buck would be working with iFOS upon retirement. Id. at ¶ 23. Shortly thereafter, the Deputy Director identified iFOS as a potential contractor to the DHS Office of Procurement Operations (DHS OPO), and iFOS was the only contractor that the Deputy Director seriously considered. Id. at ¶ 25. Despite a mandatory “one-year cooling off period” imposed by federal law on Dr. Buck, the Deputy Director never informed anyone else at DHS of Dr. Buck's involvement with iFOS and the contract at issue. Id.

The Complaint alleges that iFOS and Ms. Smith conveyed to DHS that an iFOS employee, B.A.S., would serve as “Strategic Advisor” under the DHS contract although Dr. Buck would surreptitiously fill that role despite his mandatory cooling off period. Id. at ¶ 30. This concealment was further designed to ensure that Dr. Buck would not have to undergo the mandatory suitability background investigation required by the contract. Id. In the months leading to the request for proposal from DHS to iFOS, Dr. Buck had frequent contact with the Deputy Director, and Ms. Smith, Dr. Buck, and B.A.S. plotted to ensure that Dr. Buck could serve as Strategic Advisor without undergoing the mandatory background check. Id. at ¶ 26-44.

On March 15, 2016, contract No. HSHQDC-16-C-00040 was executed by iFOS and DHS for a term of March 16, 2016 to March 15, 2018. Id. at ¶ 45. Under the contract, only the DHS

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Contracting Officer responsible for the contract could waive the requirement regarding suitability background investigations, and the officer assigned to this contract never waived this requirement. Id. at 46. During the months following the execution of the contract and until July 3, 2017, Ms. Smith signed invoices falsely representing to DHS that B.A.S. performed hundreds of hours of work on the contract that was in fact performed by Dr. Buck. Id. at ¶ 62-121. From March 2016 to July 2017, iFOS, Ms. Smith, and others took affirmative steps to conceal from DHS Dr. Buck's involvement with the contract, including: 1) submitting false invoices to DHS showing Dr. Buck's time on the contract performed by iFOS employee B.A.S. while iFOS kept separate internal time records of Dr. Buck's time worked; 2) funneling Dr. Buck's communications with the Deputy Director through the iFOS email accounts of iFOS personnel other than Dr. Buck; creating an email account for Dr. Buck substantially similar to the group account for the contract; and 5) permitting Dr. Buck to work on the DHS contract without completing a DHS mandatory suitability background investigation. Id. at ¶ 49.

Beginning on July 30, 2017, after Dr. Buck's cooling off period, Ms. Smith began signing invoices identifying Dr. Buck or his company. Id. at ¶ 122. On July 3, 2017, a DHS employee emailed iFOS about a new line item for TSI-Dr. Buck's limited liability company-and asked if TSI “refers to strategic advisory services provided by Dr. Ken Buck[?]” Id. at ¶ 121. iFOS personnel confirmed that this item referred to services provided by “Ken Buck.” Id. Despite another inquiry from DHS on December 12, 2017, Ms. Smith failed to provide DHS with information regarding Dr. Buck's involvement in the contract or his involvement in obtaining the contract. Id. at ¶130. When DHS directly asked about “K Buck” on iFOS' invoices on December 21, 2017, Ms. Smith deceitfully claimed that Dr. Buck was an independent contractor and “we obtain background checks and validate security clearances on independent consultants.” Id. at ¶ 131.

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Despite requests from December 2017 to early January 2018, iFOS and Ms. Smith never submitted Dr. Buck for a mandatory background check as required by the contract.

In the present motion, Defendants argue that Plaintiff has failed to state a claim under Federal Rule 12(b)(6) since Plaintiff released all claims, including those against Defendants, in its public settlement agreement with Dr. Buck. (ECF No. 13 at p. 10). Furthermore, Defendants argue that Plaintiff cannot plead quasi-contract claims in the...