Carahsoft and FBI confirm raid on Reston office; SAP reportedly involved

“Carahsoft is fully cooperating in this matter,” says a spokesperson.

Carahsoft confirmed to CRN that representatives from the U.S. Department of Justice came to the solution provider giant’s office on Tuesday as part of an investigation into another company.

In an email, a spokesperson for the government-affiliated IT company – No. 16 on CRN’s 2024 Solution Provider 500 – said the ministry is “conducting an investigation into a company with which Carahsoft has done business in the past.”

“Carahsoft is cooperating fully in this matter,” the spokesman said. “We are continuing to conduct our business as usual.”

[RELATED: ClearML Allies With Carahsoft To Provide Its MLOps Platform To Government Agencies]

Carahsoft FBI Raid

A spokesperson for the FBI — part of the U.S. Department of Justice — confirmed in an email to CRN that the bureau “conducted court-authorized law enforcement action on Sunset Hills Road yesterday morning,” but declined further comment. Carahsoft’s headquarters are on Sunset Hills Road in Reston, Virginia, the company’s website says.

According to reports on Wednesday, US authorities are investigating SAP, Carahsoft and others for alleged price fixing.

An SAP spokesperson told CRN by email that the vendor had “no knowledge of any criminal investigations against SAP in connection with Carahsoft.”

“All we can say is that there has been a civil investigation by the Department of Justice and SAP has cooperated with the investigation from the beginning,” the spokesman said.

According to Nextgov/FCW, the raid may have been due to Carahsoft’s failure to provide complete transaction records for a Justice Department investigation. The raid took place Tuesday morning, just days before the end of the U.S. government’s fiscal year on September 30.

According to Bloomberg, Justice Department lawyers began investigating SAP and Carahsoft at least since 2022 for potentially conspiring to overcharge the U.S. military and government agencies. The investigation focuses on more than $2 billion worth of SAP products sold to the U.S. government since 2014. Carahsoft has won more than 600 federal contracts for SAP products valued at more than $990 million and facilitated additional sales valued at $1 billion or less.

In 2015, Carahsoft and VMware agreed to pay $75.5 million to settle a False Claims Act case with the U.S. government, which included allegations of overpayment to the government. The companies did not admit any wrongdoing as part of the settlement.

In January, following investigations by the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice, SAP agreed to pay more than $220 million to settle corruption allegations.

Bloomberg added that a subsidiary of Accenture – No. 1 on CRN’s 2024 Solution Provider 500 – is also under federal scrutiny as part of the SAP investigation, but noted that the investigations could be concluded even without a formal allegation of wrongdoing.

In October, an Accenture subsidiary announced that the Department of Justice was investigating the company “over whether one or more employees provided inaccurate information to an evaluator who was evaluating an Accenture Federal Services (AFS) service offering on behalf of the U.S. government and whether the service offering fully implemented required federal security controls.”

It is not clear whether the Accenture investigation, which was announced in October, is part of the SAP and Carahsoft incidents. CRN has asked Accenture for comment.