Flores Family Agrees to Pay Additional $2.5 Million in Civil Penalties for Defrauding United States
SAN ANTONIO / Monday, September 28, 2026 – The United States has 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 at U.S. Army medical facilities. The agreements require the defendants to collectively pay $2.5 million in civil penalties under the False Claims Act.
In August 2023, Kenneth, Irma, and Christopher Flores pleaded guilty to criminal fraud and gratuities charges. Shortly after they were sentenced in September 2024, the United States filed a civil lawsuit against these three individuals as well as KDHK, Inc., Kenneth Flores’ company, in federal court in San Antonio. See United States v. KHDK, Inc. et al., Civil Action No. 5:24-cv-1023. The United States alleged that the defendants unlawfully conspired with federal employees to steer a housekeeping contract in Hawaii and increase the value of a second housekeeping contract in Washington. In furtherance of that scheme, 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.
Under the terms of the civil resolutions announced today, KDHK, Inc., Kenneth Flores, and Irma Flores will jointly pay the United States $2,000,000, and Christopher Flores will individually pay the United States $500,000, for their respective roles in perpetuating this fraud. The United States previously obtained judgments imposing a total of $547,613.92 in civil penalties against the two federal employees who conspired with the Flores family. See United States v. Kelley, Civil Action No. 5:24-cv-558; United States v. Mathes, Civil Action No. 5:24-cv-980.
“This settlement shows my office does not leave any stone unturned when it comes to those who defraud the United States,” said U.S. Attorney for the Western District of Texas, Justin R. Simmons. “The convicted members of the Flores family already confessed to betraying the American public and stealing from taxpayers. It was imperative that we follow through to ensure those responsible in the scheme were held fully accountable for their actions. Our Civil AUSAs who work these types of cases are laser focused on protecting the public fisc from thieves like these.”
“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 Special Agent in Charge Chad Gosch, Defense Criminal Investigative Service (DCIS), Southwest Field Office. “As the criminal investigative arm of the Department of Defense’s Office of Inspector General, DCIS will ardently pursue those who corrupt the procurement process for personal gain.”
DCIS and the U.S. Army Criminal Investigation Division led the investigation of this matter. Assistant U.S. Attorney Thomas Parnham negotiated the civil resolutions on behalf of the government.
The claims resolved by the settlement are allegations only and there has been no determination of liability.
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Source: U.S. Attorney's Office, Western District of Texas
