North Carolina Defense Contractor Sentenced for $15 Million Fraud

NORFOLK, Va. – A Fayetteville defense contractor was sentenced today to five years in prison for his role in multiple conspiracies to overbill the federal government by more than $15 million on government contracts.

According to court documents, Philip A. Mearing, 48, is the owner of Global Services Corporation (Global). In 2004, Mearing, along with a co-conspirators Kenneth Bricker and Ken Deines, entered into an agreement whereby fraudulent payments were made by Global to Bricker’s two straw corporations, Tempo and BPM, regarding hundreds of invoices for work and services on behalf of Global that were never performed by Tempo and BPM. As part of their agreement with Global, Bricker, with the consent of Mearing, normally retained five percent of the fraudulent payments made by Global to Tempo and BPM. Shortly thereafter, Bricker transferred the remaining 95 percent of these fraudulent payments to Mearing and to DeShas, an Ohio LLC controlled by Mearing. From 2004 to 2014, Bricker received approximately $13.6 million in fraudulent payments from Global, retained approximately $558,000 for his personal use, and subsequently issued checks totaling approximately $13 million to DeShas or to Mearing.

In a separate conspiracy to defraud the government, Mearing, Deines, and William Hutsenpiller, the former Comptroller for Norfolk Ship Support Activity (NSSA), knowingly and willfully conspired to submit false claims to the government via false and/or fictitious invoices that resulted in a loss of approximately $1.8 million.

During the sentencing hearing today, the Court found that the loss to the government was over $15 million. A hearing to determine forfeiture and restitution will be held on December 12.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, Martin Culbreth, Special Agent in Charge of the FBI’s Norfolk Field Office, Robert E. Craig, Special Agent in Charge for the Defense Criminal Investigative Service’s (DCIS) Mid-Atlantic Field Office, and Cliff Everton, Special Agent in Charge of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, made the announcement after sentencing by U.S. District Judge Arenda Wright Allen. Assistant U.S. Attorneys Alan M. Salsbury and Stephen W. Haynie prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-94.