Debarment for Fraudulent Practices in Santos Novos Tempos Project

The World Bank Group's Sanctions Board, in Decision No. 141, dated June 30, 2023, imposed a nine-month debarment with conditional release on a Brazilian firm and its Technical Director (Respondent Individual) involved in the Santos Novos Tempos Project. The respondents were found guilty of fraudulent practices under a contract for supervising construction works and providing technical assistance.

Contentions of the INT: The Integrity Vice Presidency (INT) accused the respondents of submitting fraudulent payment claims. These claims were based on misrepresentations regarding the services provided by consultants under a contract to supervise the construction works. Specifically, the respondents allegedly misclassified services, overstated hours worked, and falsely claimed payments for services not performed by certain consultants.

Contentions of the Respondents: The respondents contested these allegations, arguing that their billing practices were justified by the complexity of the project and that they had received verbal authorization from the Project Management Unit (PMU) for the disputed billing practices.

Analysis of Evidence: The Sanctions Board carefully reviewed the evidence, including contractual documents, payment requests, timesheets, and witness testimony. The Board concluded that the respondents knowingly engaged in fraudulent practices by misclassifying and overstating consultant services, leading to unwarranted financial gains under the project. The Board found the respondents' defenses unconvincing, particularly their claim of receiving verbal authorization from the PMU, which was unsupported by contemporaneous evidence.

Determination: The Board imposed a sanction of debarment with conditional release for a period of nine months on both the firm and the individual respondent. This sanction was deemed appropriate given the severity of the misconduct, which included repeated fraudulent claims and attempts to conceal the misrepresentations. The Board also applied certain aggravating factors, such as the central role of the respondent individual in the misconduct and the involvement of management in the fraudulent practices.

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