When FBI agents in Los Angeles, CA come knocking on your door or you have been served with a Civil investigative demand alleging False Claims Act violations and government contract fraud, these are serious allegations. How you respond or what you say to federal agents can seriously impact the case that the government is building against you. You have constitutional rights that you can protect. Having a team of defense contractor fraud attorneys in Los Angeles, California that understands both the federal procurement side and the federal prosecution playbook can be an asset while preserving your rights.

Former DOJ Prosecutors and Former Procurement Officials Who Understand the Rules. Call 1.866.601.5518 for a free, confidential consultation. Lines answered 24/7.

Watson & Associates LLC defends aerospace, defense contractor, and small business government contractors in Los Angeles, Orange County, and across Southern California in federal procurement fraud investigations — both the criminal track and the civil False Claims Act track, often running at the same time.

We help federal contractor executives and general counsel in the Los Angeles area who have received a subpoena, a Civil Investigative Demand, a target letter, or an unannounced visit from federal agents.

What Federal Agencies Handle Government Contract Fraud Investigations in Los Angeles?

Several different agencies can be involved, and which one is investigating you tells you a lot about what stage the matter is at.

• The Department of Justice is the primary prosecuting authority. The U.S. Attorney’s Office for the Central District of California handles criminal prosecutions arising in the Los Angeles area; the DOJ Civil Division handles False Claims Act cases.
• The FBI is typically the agency conducting the underlying criminal investigation — search warrants, employee interviews, subpoenas.
• The Defense Criminal Investigative Service investigates fraud connected to Department of Defense contracts and programs, which covers a large share of Southern California’s aerospace and defense contractor base.
• Each federal agency’s Office of Inspector General investigates fraud, waste, and abuse specific to that agency — NASA-OIG, GSA-OIG, and others, depending on which agency you contract with.
• The Small Business Administration’s Office of Inspector General investigates fraud in small business programs, including 8(a), SDVOSB, and HUBZone eligibility.

Knowing which agency is on the letterhead matters because it tells you whether you’re looking at a criminal matter, a civil matter, or both — and the two require different, coordinated responses.

What Should I Do If FBI Agents or Another Federal Agency Contacts My Business?

You are not required to answer questions without an attorney present, and declining to answer is not evidence of guilt. In practice, that means:

• Do not give an informal, off-the-record statement to an agent, even if it feels routine or the agent frames it as a formality.
• Do not alter, delete, or reorganize any records connected to the matter, including routine auto-deletion — a duty to preserve documents can attach earlier than most contractors expect.
• Do not conduct your own internal investigation before involving counsel. Without privilege protection built in from the start, an internal review can create evidence the government later uses against you.
• Route all contact — from agents, auditors, or investigators — through one person, and call counsel before responding to anything in writing, including the subpoena or CID itself. The response window is usually negotiable through counsel.

Immediate Steps to Take if You’ve Received a Subpoena, CID, or Target Letter in Los Angeles

If you have received a subpoena, a Civil Investigative Demand (CID), or a target letter from a federal agency like the DOJ, DOD, OIG, or FBI, you are officially under investigation for procurement fraud in Southern California. This is a critical moment. The actions you take in the next 24 hours can significantly impact the outcome of your case. It is imperative that you do not attempt to handle this on your own.

Our Los Angeles government investigation attorneys can intervene immediately to:

• Manage all communications with federal agents and prosecutors.
• Protect your constitutional rights and prevent you from making incriminating statements.
• Begin building a proactive defense by analyzing the government’s allegations and gathering exculpatory evidence.
• Challenge the scope and validity of the subpoena or CID.
• Negotiate with the government to potentially avoid criminal charges or reduce civil penalties.

We have extensive experience responding to CIDs and subpoenas from all major federal agencies and have successfully defended clients in the Central and Eastern Districts of California.

Defending Los Angeles Aerospace & Defense Contractors

Los Angeles is the epicenter of the nation’s aerospace and defense industry. From the major prime contractors in El Segundo and Redondo Beach to the hundreds of subcontractors throughout Southern California, the region is a primary focus for federal fraud enforcement. Our Los Angeles aerospace defense contractor fraud attorneys understand the unique challenges facing this industry.

We defend contractors against a wide range of allegations, including:

• Defective Pricing & TINA Violations: Allegations of providing inaccurate or incomplete cost and pricing data during contract negotiations.
• Buy American Act (BAA) & Trade Agreements Act (TAA) Violations: Investigations into the country of origin for products and components.
• Cost Mischarging: Allegations of improperly billing costs to government contracts, including labor, materials, and overhead.
• Product Substitution: Accusations of providing products that do not meet contract specifications.
• False Claims Act & Qui Tam Lawsuits: Defending against whistleblower lawsuits alleging fraud against the government.

Whether you are a prime contractor for the DOD or a small business supplier to NASA, our defense contractor fraud lawyers in Los Angeles have the experience and knowledge to protect your interests.

What’s the Difference Between the Criminal and Civil Tracks in a Government Contract Fraud Case?

They can run simultaneously, and a Los Angeles contractor is frequently facing both at once. On the criminal side, the exposure is personal — jail time, fines, and a criminal record for the individuals involved. The FBI or DCIS typically investigates, and the U.S. Attorney’s Office for the Central District of California prosecutes. The defense work is adversarial from the start: engaging with prosecutors, testing the government’s evidence, and preparing for the possibility of trial.

On the civil side, the exposure is financial and can be severe enough to end the business. Under the False Claims Act, liability is three times the government’s actual damages, plus a per-claim civil penalty currently ranging from $14,308 to $28,619 for penalties assessed after July 3, 2025, under 28 C.F.R. § 85.5. Because “per claim” can mean per invoice or per line item, the total can significantly exceed the government’s actual loss. The DOJ Civil Division and individual agency Inspectors General typically handle this track.

A firm that only handles one side of this will either miss the criminal exposure hiding inside what looks like a civil billing dispute, or miss the contract-specific context that often decides whether a criminal allegation holds up. Both need to be evaluated together, from the same firm, from the first call.

What Types of Government Contract Fraud Allegations Come Up Most in Southern California?

Southern California’s concentration of aerospace, defense, and federal construction work produces a fairly consistent set of allegations:

• Defective pricing and Truth in Negotiations Act violations — allegations of inaccurate or incomplete cost and pricing data during contract negotiations.
• Cost mischarging — improperly billing labor, materials, or overhead to a government contract.
• Product substitution — providing products that don’t meet contract specifications.
• Buy American Act and Trade Agreements Act violations — misrepresenting the country of origin for products or components.
• Bid-rigging and procurement integrity allegations — collusion or improper influence over the contract award process.
• Small business and SBA program fraud — misrepresenting eligibility for 8(a), SDVOSB, HUBZone, or other set-aside programs, including affiliation and pass-through allegations.
• Construction fraud on federal projects — false compliance certifications, substandard materials, or change-order fraud on GSA or military construction work.
• False Claims Act and qui tam exposure — whistleblower lawsuits alleging fraud in contract performance or billing.

Small Business Set-Aside Defense Contractor Fraud Lawyers in Los Angeles

The federal government sets aside billions of dollars in contracts each year for small businesses, including businesses owned by women, veterans, and socially and economically disadvantaged individuals. However, these programs are also a major focus of fraud enforcement.

Common Small Business Fraud Allegations

• Affiliation: The government alleges that your company is affiliated with another company, making you ineligible for small business status.
• Size Standards: The government alleges that your company exceeds the size standards for the NAICS code of the contract.
• Ownership & Control: The government alleges that your company is not actually owned and controlled by the qualifying individual (e.g., a woman, veteran, or disadvantaged individual).
• Pass-Through: The government alleges that your company is a “pass-through” that is not performing the required percentage of work on the contract.

Defending Against Small Business Fraud Allegations

Our Southern California government contracts lawyers have extensive experience defending small businesses against fraud allegations. We understand the complex regulations governing small business programs and can help you navigate SBA size protests, OIG investigations, and False Claims Act lawsuits.

Federal Construction Fraud Defense for Los Angeles Contractors

Los Angeles is home to numerous federal construction projects, from GSA buildings to military base infrastructure. Construction contractors on these projects face intense scrutiny and are frequently targeted for fraud investigations. At Watson, our defense contractor fraud law firm in Los Angeles is here to aggressively defend False Claims Act ( civil and criminal) .

Common Construction Fraud Allegations

• Bid-Rigging: Collusion with other contractors to manipulate the bidding process.
• False Certifications: Falsely certifying compliance with Buy American Act, Davis-Bacon Act, or other requirements.
• Substandard Materials: Using materials that do not meet contract specifications.
• Cost Mischarging: Inflating costs or billing for work not performed.
• Change Order Fraud: Submitting fraudulent change orders to increase the contract price.

How Does a Qui Tam Lawsuit Work, and What Should I Know If I’ve Been Served With One?

A federal qui tam lawsuit is filed by a whistleblower — called a relator — who has knowledge of alleged fraud against the government. It’s filed under seal, meaning it stays confidential while the government investigates, and the government then decides whether to intervene or let the whistleblower proceed independently. If the case results in a recovery, the whistleblower is generally entitled to a share, typically 15 to 30 percent depending on whether the government intervened.

If you’ve been served with a qui tam complaint in the Central District of California, the response typically involves investigating the relator’s specific allegations, evaluating whether the complaint meets the legal pleading requirements for fraud claims, and — if DOJ hasn’t yet decided whether to intervene — making the case for declination directly to the prosecutor before that decision is made. No firm can promise a dismissal or a favorable outcome; what an experienced team can do is give you a realistic, early read on where the complaint is strong and where it isn’t.

What Makes Aerospace and Defense Contractor Fraud Cases in Los Angeles Different?

Los Angeles is one of the country’s largest aerospace and defense contracting hubs, and that industry carries a few compliance layers that don’t apply to a typical federal contractor:

• Cost Accounting Standards compliance adds a layer of technical complexity that most fraud allegations in this industry actually turn on — a mischarging allegation is frequently a CAS interpretation dispute in disguise.
• Classified program involvement can add security and access complications to how an investigation or a defense is conducted.
• Supply chain and country-of-origin compliance under the Buy American Act and Trade Agreements Act extends liability down through subcontractors and suppliers, not just the prime.

Defending these matters effectively usually requires someone who has actually worked with cost accounting standards and government contract structures, not just criminal defense generally.

What Are the Actual Government Contract Fraud Penalties and False Claims Act Consequences?

False Claims Act exposure: Liability is three times the government’s actual damages, plus a per-claim civil penalty. For penalties assessed after July 3, 2025, that range is $14,308 to $28,619 per claim under 28 C.F.R. § 85.5 — and “per claim” can mean per invoice or per line item, which is why the total can significantly exceed what the government actually lost. There is a narrower path to double (rather than treble) damages under 31 U.S.C. § 3729(a)(2) for a defendant who self-discloses within 30 days of learning of a violation, before any government action commences — a decision that should be made with counsel, not by default.

False statement exposure (18 U.S.C. § 1001): Every violation is a felony — up to five years per count, and each false statement is charged separately, so a single interview or a series of monthly certifications can generate multiple counts. This applies whether or not the underlying conduct being asked about was itself illegal; the statement is the crime.

Suspension and debarment: Under FAR 9.406 and 9.407, a suspending and debarring official can act on a lower standard of proof and a separate timeline than a criminal or civil case — in practice, this is often the fastest-moving and most damaging consequence, because it can end your ability to contract with the federal government regardless of how the underlying investigation resolves.

What none of this means: these figures describe statutory exposure, not a prediction about your matter. Most investigations resolve short of the maximum penalty structure, and a meaningful share are declined or resolved administratively. No responsible attorney will tell you in advance how your specific matter will end.

What Are the Actual Penalties for Federal Government Contract Fraud?

Criminal exposure varies by statute, but commonly includes prison time and fines up to $250,000 for individuals or $500,000 for organizations, depending on the specific charge. Civil False Claims Act exposure is three times the government’s actual damages plus a per-claim penalty of $14,308 to $28,619 under current figures. Beyond the direct financial exposure, contractors also face suspension and debarment risk under FAR 9.406–9.407, which can end the ability to contract with the federal government independent of how the underlying case resolves.

These are statutory ranges, not a forecast of your outcome. Most defense contractor fraud matters resolve well short of the maximum, and a meaningful share are declined or resolved administratively. No responsible defense contractor fraud law firm in Los Angeles, CA can tell you in advance how your specific matter will end. Call our Los Angeles Government Contract Fraud Attorneys to get the facts about your case.

Who Handles Defense Contractor Fraud Cases at Watson & Associates LLC

Meet Our Maryland Government Contracts & Procurement Fraud Defense Team

Government Contracts Attorneys

Theodore P. Watson, Esq — A retired U.S. Air Force member and former federal procurement official within the Department of Defense, Theodore Watson leads the firm’s government contracts and procurement fraud defense practice. Admitted to the U.S. Supreme Court and experienced before the U.S. Court of Appeals for the Federal Circuit, he brings over 20 years of combined procurement and federal criminal defense experience to contractors facing both compliance questions and active investigations. Read more.

Cheryl Adams, Esq— A former federal Contracting Officer, Cheryl Adams brings cradle-to-grave, hands-on experience with government procurement — from acquisition planning through contract closeout.

Having worked directly alongside government auditors and conducted government property audits herself, she gives contractors an insider’s read on how the FAR is actually applied, not just how it’s written. Read more.

Jennifer Higgins — A former senior attorney with the U.S. Small Business Administration, Jennifer Higgins focuses on SBA program compliance and litigation — 8(a), SDVOSB, WOSB, and HUBZone eligibility, size and affiliation audits, and representation before the SBA and the Office of Hearings and Appeals. Her background in federal agencies means she understands how these programs are scrutinized from the inside. Read more.

Procurement Fraud Defense Attorneys

Robert “Bob” Ayers — With more than 20 years defending federal criminal cases, including time as a corporate defense attorney, Bob Ayers has represented corporate executives and public officials in matters involving fraud, bribery, and obstruction.

He guides contractors through every stage of a procurement fraud matter, from a quiet internal investigation through trial preparation. Read more.

Chris Mancini (Former DOJ Prosecutor)— Chris Mancini brings 45 years of legal experience to the firm, including eight years as an Assistant U.S. Attorney in the Southern District of Florida, where he served as Deputy Chief of both the Criminal and Civil Divisions.

That dual-division background gives him a rare vantage point on how the government decides whether a contracting matter proceeds civilly, criminally, or both. Read more.

Carolyn L. Oliver (Former DOJ prosecutor and Assistant U.S. Attorney) in the Major Frauds Section for the Southern District of California, Carolyn Oliver brings over 40 years of experience to the firm’s federal white collar defense practice.

She represents corporations, executives, and individuals in complex federal investigations — often the same category of case she once prosecuted. Read more.

Wise D. Allen, Esquire, Of Counsel, A former Veteran Lieutenant Commander Judge Advocate for the United States Military, Wise Allen brings extensive knowledge and experience in resolving corporate defense and litigation in vast international and national legal issues.

Mr. Allen’s federal litigation experience includes serving as a former appellate attorney representing the United States and as a federal white-collar criminal defense attorney for defendants in trials that led to overwhelmingly favorable outcomes on contested issues and non-contested resolutions. Read  more..

Frequently Asked Questions

What should I do if FBI agents show up at my business?

Do not answer questions without an attorney present. You may politely decline and ask them to contact your counsel. Call 1.866.601.5518.

What’s the difference between a criminal and a civil investigation?

A criminal investigation can result in prison time and a criminal record for individuals. A civil investigation under the False Claims Act can result in treble damages and per-claim penalties severe enough to threaten the company’s survival. Contractors frequently face both simultaneously, which is why they need to be handled by one coordinated team rather than two separate firms.

How long does a government contract fraud investigation take?

Months to several years, depending on complexity and whether the government intervenes in a qui tam matter. Early, informed engagement with the prosecutor’s office is generally what shortens that timeline or resolves a matter before charges are filed.

Can a matter be resolved before charges are filed?

Sometimes, yes — declination and administrative resolution are real, common outcomes, not exceptions. Whether that’s realistic in a specific matter depends on the facts and the record, and no attorney can forecast it at the first call.

What are the penalties for government contract fraud?

Criminal penalties vary by statute and can include prison time and substantial fines. Civil penalties under the False Claims Act include treble damages plus a per-claim penalty currently set at $14,308 to $28,619.

Talk to a Los Angeles Government Contract Fraud Attorney

Watson & Associates LLC’s Los Angeles Government Contract Fraud Attorneys represent prime and subcontractors throughout Los Angeles, Orange County, the Inland Empire, and across Southern California in federal procurement fraud and False Claims Act matters. Our practice is federal, and we represent contractors nationwide.

Call 1.866.601.5518 — answered 24/7 or Contact us online for a free, confidential consultation

Los Angeles meeting location, by appointment: 1800 Vine St, Los Angeles, CA 90028

San Diego meeting location, by appointment: 402 West Broadway, Suite 400, San Diego, CA 92101

Firm offices: Denver, Colorado and Washington, DC

Attorney advertising. This page is general information and does not create an attorney-client relationship or constitute legal advice. Prior results do not guarantee or predict a similar outcome in any other matter. Watson & Associates LLC’s practice is generally limited to federal law; the firm associates local counsel where required.