Spokane Valley’s Monaco Enterprises accused of defrauding U.S. military in federal court
The federal government on Friday accused a Spokane Valley company of defrauding the U.S. military out of millions of dollars.
The U.S. Attorney’s Office said in a complaint that Monaco Enterprises inflated prices for its fire and security systems sold to military bases worldwide. To hide those inflated costs, the company prepared three sets of invoices – one for the military base, another for government examiners and auditors and a third set for federal law enforcement investigating the alleged fraud, the complaint said.
The U.S. Attorney’s Office had earlier agreed to join two whistleblower lawsuits filed against Monaco Enterprises by former employees, who allege the same kind of fraud detailed in the lengthy complaint filed Friday. Trial began on those lawsuits this week in federal court.
The claim singles out company president and CEO Gene Monaco and his son-in-law, Chief Operating Officer Roger Barno, saying both men reaped millions of dollars in bonuses and dividends during the time the alleged fraud occurred. Monaco received more than $14 million and Barno received at least $3.5 million to $5 million, the complaint said.
The complaint alleges Monaco and Barno “either knew of the routine fraudulent billing practices or at least recklessly disregarded those practices while increasing the company’s bottom line,” according to the U.S. Attorney’s Office.
From 2008 to 2013, Monaco Enterprises made more than $65 million on its military orders, the complaint said.
Monaco Enterprises has been a federal contractor since the early 1970s. It’s located at 14820 E. Sprague Ave. and employs just over 100 people.
Gene Monaco couldn’t be reached for comment Friday evening, and the company’s lawyers in Chicago and Spokane didn’t immediately return messages seeking comment.
The government is seeking unspecified damages and penalties against the company and Monaco and Barno. The federal False Claims Act calls for mandatory tripling of damages as well as a mandatory penalty of $5,500 to $11,000 for each false report, statement or claim, the U.S. Attorney’s Office said in a news release.