FBI Raids Carahsoft HQ Over Overcharging Allegations

The Federal Bureau of Investigation raided the headquarters of Carahsoft Technology Group, the IT services provider for federal agencies.

Agents from the FBI and the Defense Criminal Investigative Service went to Carahsoft's offices this week for what the FBI describes as "court-authorized law enforcement activity." The Bureau confirmed that it visited the cybersecurity provider in Reston, Virginia, but declined to provide additional details. The agents reportedly searched employees' electronic devices, questioned select workers and sent them home, according to InsideNoVa.

“We can confirm that DCIS executed a joint search warrant operation with the FBI in northern Virginia yesterday morning. We have nothing further to add, as this is an open investigation,” a representative of the DCIS said in a statement.

"Currently, we are fully cooperating on this matter and operating business as usual," Carahsoft told InsideNoVa. "Any additional information or comments will be made later [or] when appropriate."

Staff at the cybersecurity provider were told on Tuesday that the raid was “part of an investigation into a company with which Carahsoft has done business in the past” and that the company is fully cooperating and "operating business as usual,” according to emails acquired by Nextgov.

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Carahsoft Faces Past of Federal Charges

The sudden raid has led some to speculate that the investigation is connected to an ongoing court case in the U.S. District Court for the District of Maryland from 2023.

The 2023 district court case related to U.S. investigations into “whether Carahsoft conspired with other companies to rig bids, inflate prices, overcharge and defraud the Department of Defense (DoD), among other federal government agencies" when it resold its products. German software firm SAP was named alongside Carahsoft, according to federal documents reviewed by Bloomberg.

Carahsoft is an IT vendor and reseller of technology products to public sector organizations. Its clients include organizations like NASA and the General Services Administration.

This is not the first time that Carahsoft has had to deal with legal action from the federal government. The IT reseller paid a $75 million fine in 2015 to settle claims that Carahsoft and VMware overcharged the government. Carahosoft denied in a settlement any wrongdoing.