(ADV-2750) Overbilling of Public Works in Brazil: Case Study - Operation Black Box
Author(s)/Presenter(s): Alan de Oliveira Lopes
Time/Location: Sunday, June 24 from 1:00pm to 2:00pm / Coronado E (4th Floor)
[Level: Basic] Brazilian Federal Criminal Experts have been using cost engineering techniques to assist police investigations of fraud in public works procurement. Forensic cost engineering analysis are complex and time-consuming. Over the last two decades, the scientific methodology applied has been improved and accepted in the Brazilian Justice System.
These technical standards are defined by the Engineering Forensic Service of the Brazilian Federal Police, located at the National Institute of Criminalistics in the city of Brasília, capital of Brazil. Overbilling of public works is a typical white-collar crime. Due to this feature, frauds are sophisticated and can occur in a variety of ways. The main types of overbilling investigated are payments for quantities not installed or services not received (material overcharging), overpriced services, product substitution/substandard materials (quality´s changing) and the increase or decrease of services contracted (worksheets manipulation).
The landmark investigation was Operation Black Box that investigated frauds in the bidding and construction of 12 airport facilities , between the years of 2006 and 2009. The total estimated overbilling was approximately US$ 500,000,000.00. Although companies and individuals accused of fraud and corruption are still being prosecuted, the success of using cost engineering techniques led to its application in hundreds of other police investigations.