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Guide to Combating Corruption & Fraud in Infrastructure Development Projects

  • Detection
    • Complaints
      • General initial interview questions
      • How to Generate Complaints and Reports
      • List of fraud reporting sites for Multilateral Development Banks
    • Red Flags
      • Red Flags Listed by Project Cycle
      • “Visible red flags” of Implementation Fraud
      • Proactive Fraud Detection Tests
    • Due Diligence
      • “Top Five” Due Diligence Background Checks
      • Free and Subscription Internet Sites
      • Local and On-Site Due Diligence Checks
      • Due Diligence Service Providers
  • Proof
    • Proving Common Schemes
      • Corruption Schemes
      • Bid Rigging Schemes
      • Collusive Bidding Schemes
      • Fraud Schemes
      • The Basic Steps of a Complex Fraud and Corruption Investigation
    • Elements of Proof for Sanctionable Offenses
      • Elements of Proof of Corrupt Practices
      • Elements of Proof of Obstructive Practices
      • Elements of Proof of Coercive Practices
      • Elements of Proof of Collusive Practices
      • Elements of Proof of Fraudulent Practices
  • Evidence
    • The Basics of Evidence for Investigators
  • Prevention
    • Anti-fraud Resources
Home » Proof » Case Examples » Case Example of Split Purchases

Case Example of Split Purchases

Nutrition Project

The owner of a small training company boasted to colleagues that he was receiving multiple sole source contract awards in exchange for kickback payments to local project officials and to representatives of the international donor.  The boasts eventually reached the donor agency which conducted an investigation.

The inquiry revealed that the training firm was organized just weeks before the project was launched and that it received more than a dozen sole source contracts, all for around the equivalent of US $75,000.  This was just under the maximum permissible amount for such awards.  The $75,000 sole source threshold was set by the corrupt donor official and was unusually high.

In an attempt to avoid detection of the scheme the owner of the training company set up a number of other shell companies, with no staff or assets, to receive further sole source contracts.  None of the companies performed all of the services required under the contracts and many of the contracts were not performed at all.  The donor fired the corrupt employee and referred the local parties to the borrower country for further action.

Category: Case Examples

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