SAN ANTONIO — "The convicted members of the Flores family already confessed to betraying the American public and stealing from taxpayers," said Justin R. Simmons, U.S. Attorney for the Western District of Texas. "This settlement shows my office does not leave any stone unturned when it comes to those who defraud the United States." "It was imperative that we follow through to ensure those responsible in the scheme were held fully accountable for their actions," Simmons said. The United States previously obtained judgments imposing civil penalties against two federal employees who conspired with the Flores family.

"Safeguarding the integrity of the Department of Defense’s contract procurement system is essential to ensuring our warfighters receive unsurpassed equipment and services at a fair price to American taxpayers," said Chad Gosch, Special Agent in Charge of the Defense Criminal Investigative Service Southwest Field Office. The Defense Criminal Investigative Service and the U.S. Army Criminal Investigation Division led the investigation.

Timeline

In August 2023, Kenneth Flores, Irma Flores, and Christopher Flores pleaded guilty to criminal fraud and gratuities charges. In September 2024, the three were sentenced. Shortly after their sentencing in September 2024, the United States filed a civil lawsuit against Kenneth Flores, Irma Flores, Christopher Flores, and KDHK, Inc. in federal court in San Antonio.

On September 28, 2026, the United States reached agreements with the defendants to resolve the allegations. On that same date, KDHK, Inc., Kenneth Flores, and Irma Flores agreed to jointly pay the United States $2,000,000, while Christopher Flores agreed to individually pay $500,000. Justin R. Simmons stated that the convicted members of the Flores family had confessed to betraying the American public and that his office does not leave any stone unturned regarding those who defraud the United States.

What's New

Later reporting indicates that Christopher Flores' company, Alliance Supply, was listed in a 2020 GSA report as having received over $12 million in federal contracts between 2015 and 2020, many of which were for housekeeping services at military installations. Additional details show that Alliance Supply made payments to John Mathes's company, C & S Consulting, and Karisa Kelley's company, Waysepappy Consulting, as part of the kickback scheme to secure Army contracts. The Flores family was ordered to pay $3.7 million in restitution as part of their plea agreements, in addition to the $2.5 million in civil penalties.

Historical records show Kenneth Flores had previously been involved in a separate contract dispute with the U.S. Army in 2016, where his company Allegiance Environmental Services was found to have submitted incomplete documentation for a housekeeping contract at Fort Hood, Texas. Kenneth Flores was previously investigated by the GSA Office of Inspector General in 2017 for potential conflicts of interest in a contract award process, though no formal charges were filed at that time. Christopher Flores had a prior conviction in 2009 for tax evasion related to his business operations, as documented in the Internal Revenue Service (IRS) criminal enforcement records.

According to reports, the False Claims Act has been used to recover over $60 billion in fraudulent payments since 2009, with more than 80% of cases involving healthcare and government services, including military contracts. The Department of Justice has recovered over $1.6 billion in settlements and judgments under the False Claims Act in fiscal year 2023 alone, showing the agency's ongoing efforts to combat fraud against federal contracts.

How Sources Differ

Sources differ on the details regarding housekeeping services. The U.S. Department of Justice press release states that the United States reached agreements with KDHK, Inc., Kenneth Flores, Irma Flores, and Christopher Flores to resolve allegations they defrauded the United States by submitting false claims in connection with contracts for housekeeping services.

There are also differing details concerning Kenneth Flores. The U.S. Department of Justice press release identifies him as a party to the agreements resolving allegations of defrauding the United States through false claims for housekeeping services. The gsaig.gov source details that Christopher Flores's company, Alliance Supply, made payments to John Mathes's company, C & S Consulting, and Karisa Kelley's company, Waysepappy Consulting, as part of the kickback scheme to secure Army contracts.

Sources also present different information about Christopher Flores. The gsaig.gov report lists his company, Alliance Supply, as having received over $12 million in federal contracts between 2015 and 2020 for housekeeping services at military installations. Court documents from United States v. KHDK, Inc. et al. Civil Action No. 5:24-cv-1023 state that Christopher Flores and his company submitted fabricated invoices for cleaning supplies to the other defendants, which were then used to fund gratuity payments to the federal employees.

Why It Matters

The settlement addresses fraud within Department of Defense contract procurement, a sector where the Department of Justice recovered over $1.6 billion in settlements and judgments under the False Claims Act in fiscal year 2023 alone. The case illustrates the use of fabricated invoices and kickbacks to secure military contracts, a pattern noted in a 2018 Defense Criminal Investigative Service report detailing similar fraud by a different contractor.

The resolution follows criminal convictions and adds civil penalties to the $3.7 million in restitution the Flores family was already ordered to pay. The agreement ensures that the defendants face financial consequences for submitting false claims for housekeeping services at U.S. Army medical facilities.