Procurement Fraud

1/15/2013 Former FEMA Exec Pleads Guilty to Conflict of Interest Charges
(CRM-FRD; DDC)

1/15/2013 Former Member of Port Authority Board Sentenced to 57 Months in Prison (DOH)

1/10/2013 Georgia Men Plead Guilty to Bribing Official to Secure Government Contracts (CRM-PIN, MDGA)

1/3/2013 U.S. Army Major Pleads Guilty in South Carolina to Defrauding U.S. Government (CRM-FRD, DSC)

12/27/2012 Caddell Construction Co. Commits to Pay $2 Million Penalty in Agreement to Resolve Criminal Fraud Violations 

12/5/2012 Kentucky-Based Defense Contractors, Owners Agree to Pay $6.25 Million to Resolve Allegations That They Submitted False Statements and Claims to Obtain Army Contracts Intended for Small Businesses (WDKY) 

12/2/2012 Two Former Development Workers Arrested for Fraud (Afghanistan Courts)

11/6/2012   California Man Sentenced to 15 Months in Prison  For Conspiracy to Defraud USAID of $386,279 – Admitted Scheme to Embezzle Agency Funds Meant for Global Health 

FOR IMMEDIATE RELEASE
Wednesday, October 10, 2012
Army Sergeant Pleads Guilty to Facilitating Theft of Fuel in Afghanistan
Second Guilty Plea Stemming from an Investigation of Fuel Theft at FOB Fenty in Afghanistan

WASHINGTON – U.S. Army Sergeant Christopher Weaver pleaded guilty today to bribery charges for his role in the theft of fuel at Forward Operating Base (FOB) Fenty, near Jalalabad, Afghanistan, announced Assistant Attorney General for the Justice Department’s Criminal Division Lanny A. Breuer.

Weaver, 29, of Fort Carson, Colo., pleaded guilty before U.S. District Judge Marcia S. Krieger in the District of Colorado to one count of conspiracy to commit bribery and one count of bribery.

Weaver’s plea is the second guilty plea arising from an investigation into fuel thefts at FOB Fenty.  On Aug. 3, 2012, Weaver’s co-conspirator Jonathan Hightower, 30, of Houston, pleaded guilty for his role in the scheme.

According to court documents, from approximately January 2010 through June 2010, Weaver and Hightower were involved in overseeing the delivery of fuel from FOB Fenty to other military bases.  As part of this process, documents generally described as “transportation movement requests” (TMRs) were created, which authorized the movement of the fuel.  Weaver pleaded guilty to participating in a conspiracy in which fraudulent TMRs, which purported to authorize the transport of fuel from FOB Fenty to other military bases, were created even though no legitimate fuel transportation was required.  After the trucks were filled with fuel, these fraudulent documents were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint in order to justify the trucks’ departures from FOB Fenty.  In truth, according to court documents, the fuel was simply stolen.

Weaver pleaded guilty to receiving payments from a representative of a military contractor that was responsible for transporting fuel in Afghanistan in exchange for facilitating the theft of approximately 100 fuel trucks.  According to Weaver’s signed plea agreement, the loss to the United States as a result of the scheme was in excess of $1.5 million.  According to court documents, Weaver sent cash back from Afghanistan to the United States, in part, by mailing the money inside a stuffed bear.

According to court documents, Hightower worked in Afghanistan as an employee of FLUOR Inc., a U.S. government contractor, from January 2010 to June 2010, where he served as a petroleum supply specialist and was responsible for receiving and disbursing fuel – primarily jet fuel known as JP-8 – for use at FOB Fenty or for transport to other military bases.  According to court documents, Hightower, Weaver and others would receive cash from a representative of a military contractor that was responsible for transporting fuel in Afghanistan, and the money would be apportioned among the conspirators.

Hightower pleaded guilty before U.S. District Judge William J. Martinez in the District of Colorado to two counts of conspiracy to receive bribes – one count involving his conspiracy with Weaver, and another count involving his conspiracy with another alleged co-conspirator at FOB Fenty.  Hightower admitted facilitating the theft of over 100 trucks of fuel and a loss to the United States in excess of $1.5 million.

The cases are being prosecuted by Assistant U.S. Attorney Mark W. Pletcher of the U.S. Attorney’s Office for the Southern District of California, formerly of the Criminal Division’s Fraud Section, and Special Trial Attorney Mark H. Dubester of the Fraud Section.  The cases were investigated by the Special Inspector General for Afghanistan Reconstruction; the Department of the Army, Criminal Investigations Division; the Defense Criminal Investigative Service; the FBI; and the Department of the Air Force, Office of Special Investigations.  Valuable assistance was also provided by the Justice Department’s Office of International Affairs.

FOR IMMEDIATE RELEASE
Wednesday, October 10, 2012
Two U.S. Contractor Employees Sentenced for Kickback Conspiracy and Tax Crimes Related to Iraq Reconstruction Efforts

WASHINGTON – Two former employees of The Parsons Company, an international engineering and construction firm, were sentenced in federal court in the Northern District of Alabama for their participation in a kickback conspiracy in Iraq and related tax crimes, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Northern District of Alabama Joyce White Vance.

Billy Joe Hunt, 57, was sentenced today by U.S. District Judge Abdul Kallon in federal court in Huntsville, Ala., to 15 months in prison, three years of supervised release, $66,212 in restitution to the Internal Revenue Service (IRS) and forfeiture of $236,472.  Gaines R. Newell Jr., 53, was sentenced yesterday by U.S. District Judge Virginia Hopkins in federal court in Birmingham, Ala., to 27 months in prison, three years of supervised release, $1,102,115 in restitution ($861,027 to the U.S. Army Corps of Engineers and $241,088 to the IRS) and forfeiture of $861,027.

On May 8, 2012, Hunt pleaded guilty to one count of conspiracy to commit mail and wire fraud and pay kickbacks, and one count of subscribing a false tax return.  On April 10, 2012, Newell pleaded guilty to one count of conspiracy to commit mail and wire fraud and to pay kickbacks, and one count of subscribing a false tax return.

According to court documents, Newell and Hunt were employed by Parsons in Iraq as program manager and deputy program manager, respectively, under a contract that Parsons held to support the Coalition Munitions Clearance Program operated by the U.S. Army Corps of Engineers in Huntsville.  The Coalition Munitions Program sought to preclude insurgents and other unfriendly groups from getting munitions that had been stockpiled, abandoned or seized, and using them against Coalition forces or the Iraqi public.  In their plea proceedings, Newell and Hunt admitted taking over $1 million in kickbacks from subcontractors from 2005 to 2007, in return for arranging to award contracts on the munitions clearance program to subcontractors.  Newell and Hunt also admitted filing false federal income tax returns by not disclosing kickback income.

On May 21, 2012, Hunt and Newell’s co-conspirator Ahmed Sarchil Kazzaz, 45, pleaded guilty for his role in the scheme. Kazzaz and his business, Leadstay Company, were indicted in the Northern District of Alabama in September 2011 for paying over $947,000 in kickbacks to Newell and Hunt.  According to the plea agreement, between March 2006 and June 2007, Kazzaz agreed to pay kickbacks to Newell and Hunt totaling 13 percent of the amounts paid by Parsons, and thus obtained over $23 million in subcontracts providing materials and equipment to Parsons. After Kazzaz’s arrest in Los Angeles on Dec. 2, 2011, this case was transferred to the Central District of California, where Kazzaz pleaded guilty.  His sentencing is set for Oct. 29, 2012 before U.S. District Judge R. Gary Klausner in the Central District of California.

The cases are being prosecuted by Catherine Votaw, Director of Procurement Fraud for the Criminal Division’s Fraud Section, and Assistant U.S. Attorney David Estes of the Northern District of Alabama.  The investigation was handled by the Special Inspector General for Iraq Reconstruction, the Defense Criminal Investigative Service, the IRS-Criminal Investigations Division and the FBI.

FOR IMMEDIATE RELEASE
Thursday, August 9, 2012
Former Co-Owner of Contracting Company Pleads Guilty to Defrauding U.S. Government

WASHINGTON – A former co-owner of a U.S. civilian contractor company pleaded guilty today to falsifying official documents in connection with Iraq reconstruction government contracts, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas.

Jill Ann Charpia, 33, formerly of San Antonio and currently of Colorado, pleaded guilty today before U.S. Magistrate Judge Henry J. Bemporad in San Antonio to a criminal information charging her with one-count of false statements to a government agency.

According to court documents, from 2008 through 2009, Charpia was the co-owner of Sourcing Specialist LLC, a privately owned company that contracted with the United States government to provide services in Iraq.  In September 2008, she contracted to provide a turn-key housing facility located outside Iraq’s International Zone to facilitate the introduction of multi-national firms desiring to develop business opportunities in Iraq.  That same month, Charpia signed and submitted to the Department of Defense (DOD) Joint Contracting Command Iraq/Afghanistan, for payment through the contract, a false invoice in the amount of $1,270,075.40 purportedly for mobilization costs.  She followed up with two invoices, one representing that she had paid $700,000 for the rental of two villas in Baghdad, and the other representing that she had paid $570,075.50 on the purchase of three armored vehicles from an Iraqi company.  In October 2008, as a result of her false and fraudulent statements, DOD caused $1,270,075.50 to be wired to Charpia’s bank account.  Charpia admitted that she fabricated both invoices and forged the signatures on the documents.  She also admitted that she did not purchase any armored vehicles and paid only half the submitted cost for the villas.

At sentencing, scheduled for Nov. 15, 2012, Charpia faces a maximum penalty of five years in prison, a maximum fine of $250,000, or twice the pecuniary gain or loss, and up to three years of supervised release.  As part of her plea agreement, Charpia agreed to pay $920,000 plus interest in restitution to the United States.

This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney Judith A. Patton of the Western District of Texas.  The case is being investigated by SIGIR, Internal Revenue Service-Criminal Investigation and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.