Former Employee of U.S. Government Contractor in Afghanistan Pleads Guilty to Accepting Kickbacks From Subcontractor

Monday, March 5, 2018

A former employee of a U.S. government contractor in Afghanistan pleaded guilty today to accepting illegal kickbacks from an Afghan subcontractor in return for his assistance in obtaining subcontracts on U.S. government contracts.

Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division; U.S. Attorney Byung J. Pak of the Northern District of Georgia; Special Agent in Charge John Khin of the Defense Criminal Investigative Service’s (DCIS) Southeast Field Office, Atlanta Resident Agency; Special Inspector General for Afghanistan Reconstruction (SIGAR) John F. Sopko; Director Frank Robey of the U.S. Army Criminal Investigation Command’s (CID) Major Procurement Fraud Unit (MPFU); Special Agent in Charge David J. LeValley of the FBI Atlanta Resident Agency and Special Agent in Charge Wendell W. Palmer of Air Force Office of Special Investigations (OSI), made the announcement.

Christopher McCray, 55, of Jonesboro, Georgia and Chattanooga, Tennessee, pleaded guilty to one count of accepting illegal kickbacks before U.S. District Judge Mark H. Cohen of the Northern District of Georgia.  He is scheduled to be sentenced by Judge Cohen on June 14 at 10:00 a.m. EST.  McCray was charged in an indictment filed on April 25, 2017 in the Northern District of Georgia with one count of conspiracy to accept kickbacks and 14 counts of accepting illegal kickbacks.

As part of his plea, McCray admitted that he was employed as the country manager for a subcontractor of an American company that was moving cargo for the Army and Air Force Exchange Service from Bagram Airfield to military bases through Afghanistan.  When the prime contractor needed McCray’s employer to take a much bigger role in the distribution, McCray had the chance to influence the choice of the necessary Afghan trucking company as a subcontractor to his employer.  McCray’s employer entered into a subcontract with an Afghan company but before the choice of the subcontractor was made, the Afghan trucking company secretly agreed to kick back to McCray 15 percent of the revenues it would receive on the contract, he admitted.  McCray thereafter remained as the only representative of his employer in Afghanistan for the duration of the subcontract and was responsible for checking the accuracy of the invoices submitted to McCray’s employer and the quality of the Afghan company’s work, all while secretly receiving the kickbacks, he admitted.

McCray received the secret payments from December 2012 to May 2014.  He and the Afghan trucking company also maintained a separate set of invoices, which showed the amounts charged to McCray’s employer and the amounts kept by the Afghan company and the amounts sent to McCray.  McCray was first paid in cash, then by wires sent to his bank in Atlanta and then by Western Union payments sent to his mother, who would deposit the funds, mostly in cash, into McCray’s bank accounts, he admitted.

DCIS, SIGAR, Army CID-MPFU, the FBI and Air Force OSI investigated this matter.  Trial Attorney James Gelber of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Brian Pearce of the Northern District of Georgia are prosecuting the case.

Roofing Company Owner and Former Facilities Manager at Sierra Army Depot Indicted for Conspiracy to Defraud the United States

Friday, October 20, 2017

Government Seeks Forfeiture of Proceeds Resulting From Conspiracy

A federal grand jury in the Eastern District of California returned an indictment yesterday against two individuals for allegedly conspiring to defraud the United States, the Department of Justice announced.

The indictment alleges that Kenneth Keyes, a former facility manager at Sierra Army Depot (SIAD), and Leroy Weber, the owner of a roofing company, participated in a conspiracy to defraud the United States from as early as February 2012, and continuing through at least July 23, 2013, by obstructing the lawful functions of the United States Army through deceitful or dishonest means.

“Yesterday’s indictment demonstrates the Antitrust Division’s commitment to pursuing individuals who seek to enrich themselves by misusing federal programs at the expense of taxpayers,” said Assistant Attorney Makan Delrahim of the Justice Department’s Antitrust Division.

SIAD is a United States Army facility located in Northern California.  In 2012, SIAD earmarked $40 million for construction and renovation projects at its site using contractors who qualified under the Small Business Administration’s 8(a) Development Program.  The program provides assistance and benefits to small businesses owned and controlled by socially and economically disadvantaged individuals.

The indictment alleges that Keyes, Weber, and other unidentified co-conspirators:

  • Recruited eligible 8(a) contractors to work as primary contractors at SIAD;
  • Represented to those contractors that Weber controlled the work and allocation of SIAD contract awards;
  • Caused prime contracts to be assigned to selected 8(a) contractors;
  • Used proprietary government pricing information to inflate contract prices for the SIAD contracts;
  • Required selected 8(a) contractors to award work to companies owned or controlled by Weber; and
  • Required a contractor to pay Weber in exchange for being awarded certain subcontracts by 8(a) contractors.

The indictment also alleges that Weber caused a company under his control to issue weekly paychecks to a relative of Keyes, and himself caused $10,000 to be paid directly to Keyes.

The purpose of this conspiracy was to enable Keyes and Weber to unjustly enrich themselves and their family members by diverting government funds intended to rebuild and repair the SIAD Army facility to themselves and their companies.

An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  Weber and Keyes each face a maximum penalty of 5 years in prison and a fine of $250,000.

The charges are the result of an ongoing federal antitrust investigation handled by the Department of Justice Antitrust Division’s San Francisco Office with assistance from the U.S. Small Business Administration Office of Inspector General, the U.S. Army Criminal Investigation Command, and the General Services Administration Office of Inspector General.  Anyone with information concerning the conspiracy should contact the Antitrust Division’s San Francisco Office at 415-934-5300.