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News | June 1, 2021

Owner of Company Providing Prosthetics and Orthotics Materials to Walter Reed National Military Center Pleads Guilty to Federal Charges in Maryland for Paying Gratuities

By DCAA Staff Writer

DCAA auditor Teshara Jones and Supervisory Auditor Anna Funck supported a multi-agency investigation leading to a guilty plea on May 14, 2021 by Bruce Thomas of Germantown Maryland. Thomas pleaded guilty to paying gratuities to a public official in exchange for official acts. Thomas is the owner and operator of Pinnacle Orthopedic Services, Inc., who from at least 2012 to 2019, provided prosthetics and orthotics materials to the Prosthetics and Orthotics Department at Walter Reed National Military Medical Center.

According to the plea agreement, from 2010 until May 2019, the Walter Reed Prosthetics and Orthotics department used Blanket Purchase Agreements (BPAs) to order and purchase prosthetics and orthotics materials. From about 2009 until May 2019, David Laufer, the Chief of the Prosthetics and Orthotics Department at Walter Reed, represented Walter Reed in ordering and purchasing prosthetics and orthotics materials, including purchases made from Thomas and Pinnacle Orthopedic Services, Inc. Thomas regularly interacted with Laufer regarding his business with Walter Reed. Pinnacle Orthopedic Services, Inc. was awarded multiple Blanket Purchase Agreements and from about 2011 to 2017 received more than $20 million in payments from the Walter Reed Prosthetics and Orthotics department for prosthetics and orthotics materials. Thomas admitted that from about 2012 to 2016, he provided Laufer with things of value, including at least $20,000 of cash gratuities, travel, and sporting event tickets. In exchange, Laufer undertook official acts in connection with the gratuities including sending multiple purchase requests obligating at least $14.75 million to Pinnacle Orthopedic Services, Inc. for prosthetics and orthotics materials and personally ordering and causing to be ordered prosthetics and orthotics material from Pinnacle Orthopedic Services, Inc. Laufer also restricted the availability of BPAs to some of the manufacturers and distributors from whom Pinnacle Orthopedic Services, Inc. purchased products, thereby inhibiting those companies from doing business directly with Walter Reed, and actively encouraged and directed those companies to sell to Walter Reed through Pinnacle Orthopedic Services, Inc., knowing that it would result in a higher price to the government.

Thomas faces a maximum sentence of two years in federal prison for paying a gratuity to a public official in exchange for an official act and is awaiting sentencing. On October 20, 2020, Laufer, pleaded guilty to acceptance of gratuities by a public official, and faces a maximum of two years in federal prison. He is awaiting sentencing.

DCAA’s auditors identified unmatched prime contractor invoices to vendor invoices on two prime contractors and computed damages from $617,655 to $682,100 related to Prime contractor's billings of vendor product.

Read the Department of Justice press release here.