Big Tech IT Distributor Carahsoft Raided by FBI in Virginia

(Bloomberg) -- Federal agents on Tuesday searched the Washington-area offices of Carahsoft Technology Corp., a major distributor of technology products to government agencies, according to people familiar with the matter.

FBI and Defense Criminal Investigative Service agents were seen at Carahsoft’s headquarters in Reston, Virginia, collecting documents and employee computers, said John Weiler, chief executive of the IT-Acquisition Advisory Council. Because of his work in the government technology contracting space, Weiler said he was informed of the search by multiple people with direct knowledge of it. 

A Carahsoft employee at the Virginia office, who asked not to be named because they were not authorized to discuss the matter, confirmed that staff had been notified of the FBI raid internally.

“Representatives from the Department of Justice came to the Carahsoft office today as they are conducting an investigation into a company in which Carahsoft has done business in the past,” said Mary Lange, a Carahsoft representative.

“Carahsoft is fully cooperating on this matter,” she said. “We are operating business as usual.”

A FBI spokesperson said the agency “conducted court-authorized law enforcement activity” on the street where Carahsoft has its offices but declined to elaborate. Mollie Halpern, a spokesperson for the Department of Defense Office of the Inspector General, said, “I can confirm that DCIS executed a joint search warrant operation with the FBI this morning in northern Virginia.”

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Carahsoft is a privately-held company that since its founding in 2004 has grown into a dominant player in the government technology procurement market. Last year, it ranked 45th on Forbes' ranking of largest private companies in the US, with $11 billion in estimated revenue and more than 2,400 employees.

On its website, Carahsoft says that it partners with thousands of vendors, resellers, system integrators and managed service providers to offer IT solutions for public sector customers in the US and Canada. Among the vendors listed on its website are Microsoft, Google, Oracle, AWS, Palo Alto Networks and CrowdStrike.

Reston, where Carahsoft’s headquarters are located, is a suburb about 20 miles from downtown Washington that’s popular with publicly traded and closely held government contractors. 

Hours after the raid, the parking lot in front of the company’s five-story office building was nearly empty. A Bloomberg News reporter who visited near the close of normal business hours was turned away at the door by two men inside the vestibule. The only other visitor was a man making a food delivery.

The FBI action was previously reported by Nextgov/FCW.