Former Chesapeake, Virginia Subcontractor Sentenced for Conspiracy to Commit Bribery

Roderic J. Smith, 50, the co-founder and former president of a government contracting company, was sentenced yesterday to 48 months in prison, followed by one year of supervised release, for conspiracy to bribe public officials.    Smith was ordered to forfeit $175,000.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney Dana J. Boente, for the Eastern District of Virginia, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, Acting Executive Assistant Director Charles T. May, Jr., of the Naval Criminal Investigative Service (NCIS) Atlantic Operations, and Special Agent in Charge Royce E. Curtin of the FBI’s Norfolk Field Office made the announcement today after sentencing by United States District Judge Henry Coke Morgan, Jr. of the Eastern District of Virginia.
On March 5, 2014, Smith pleaded guilty to a criminal information.    According to court documents, Smith was the co-founder and president of a contracting company located in Chesapeake, Virginia, that sought contracting business from the United States Navy Military Sealift Command.    In approximately November 2004, Smith joined an extensive bribery conspiracy that spanned four years, involved multiple co-conspirators, including two different companies, and resulted in the payment of more than $265,000 in cash bribes, among other things of value, to two public officials performing work for the Military Sealift Command, Kenny E. Toy and Scott B. Miserendino, Sr.    In exchange for the bribe payments, Smith’s business, referred to as Company A in court documents, received lucrative business from the Military Sealift Command that amounted to approximately $3 million in task orders during the time period of the conspiracy.
As part of his guilty plea, Smith also admitted to engaging in a scheme to conceal his criminal activity.    According to the plea agreement, Smith admitted to paying more than $85,000 to his business partner, Dwayne A. Hardman, in an attempt to prevent Hardman from reporting the bribery scheme to law enforcement authorities.
Earlier this year, four other individuals pleaded guilty in connection with the bribery scheme.    On Feb. 12, 2014, Kenny Toy, the former Afloat Programs Manager for the Military Sealift Command’s N6 Command, Control, Communication, and Computer Systems Directorate, pleaded guilty to accepting bribes from Smith and others.    On Feb. 18, 2014, Smith’s business partner, Dwayne A. Hardman, pleaded guilty to bribery.    On Feb. 19, 2014 and April 4, 2014, respectively, Smith’s associate, Michael P. McPhail, and another Smith associate, Adam C. White, pleaded guilty to conspiracy to commit bribery.
On May 23, 2014, a grand jury in the Eastern District of Virginia indicted two individuals in connection with the bribery scheme, Scott B. Miserendino, Sr., a former government contractor who performed work for the Military Sealift Command, and Timothy S. Miller, a businessman whose company sought contracting business from the Military Sealift Command.    The indictment charges Miserendino with one count of conspiracy to commit bribery, one count of bribery, one count of conspiracy to obstruct a criminal investigation and to tamper with a witness, and one count of obstruction of a criminal investigation.    The indictment charges Miller with one count of conspiracy to commit bribery and two counts of bribery.    The trial on these charges is scheduled to begin on Sept. 30, 2014, before Chief Judge Rebecca Beach Smith.    The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The case was investigated by the FBI, NCIS and DCIS.    The case was prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the U.S. Attorney’s Office for the Eastern District of Virginia.

Defense Department Employee and Two Prime Contractors Plead Guilty in Widening Bribery / Kickback Case



Former FEMA Executive Pleads Guilty to Federal Conflict of Interest Charge Defendant Sought Job From Company That Did Work for FEMA

WASHINGTON—Timothy W. Cannon, 63, the former director of human resources at the Federal Emergency Management Agency (FEMA), pleaded guilty today to a charge of conflict of interest for negotiating employment with a polling and consulting services company that had a multi-million-dollar contract with FEMA, supervised by Cannon.

The plea occurred before the Honorable Amy Berman Jackson of the U.S. District Court for the District of Columbia. Sentencing is scheduled for April 9, 2013. The charge carries a statutory maximum of five years in prison.

The guilty plea was announced by Ronald C. Machen, Jr., U.S. Attorney for the District of Columbia; Assistant Attorney General Lanny A. Breuer of the U.S. Department of Justice’s Criminal Division; Debra Evans Smith, Acting Assistant Director in Charge of the FBI’s Washington Field Office; Christopher Cherry, Special Agent in Charge of the General Services Administration Office of Inspector General for the National Capital Region; and Mike Dawson, Special Agent in Charge of the U.S. Department of Homeland Security Office of Inspector General’s Washington Field Office.

According to the government’s evidence, from July 2007 through February 2009, Cannon was the director of FEMA’s Human Capital Division. In 2007, Cannon had discussions with a firm, identified in court papers as “Company A,” about FEMA hiring the firm to provide consulting services on human resources matters at FEMA. The work would be done through a project that would eventually be called the “BEST Workforce Initiative.”

In March 2008, the chief executive officer of Company A e-mailed another Company A employee, stating Cannon “said he has done everything to get a job at [Company A] because he believes so much in our products…said he wants to do a real good job at FEMA and that mabye [sic] he would try again….” On April 22, 2008, Company A’s CEO e-mailed another Company A employee that “…if [Cannon] gets us a big deal at FEMA…i [sic] think we should hire him…because he will be a ‘client’ hire…which might be good[.]” Later in the same e-mail chain, Company A’s CEO asked, “[I]s the ink dry yet on our deal with fema [sic] [?]” The Company A employee replied, “[N]o might be mid-May.” Company A’s CEO then stated, “[W]e should wait of course to see if we win a big quality deal here[.]”

On August 12, 2008, Company A was hired to administer the BEST Workforce Initiative at FEMA. The contract was valued at approximately $6 million over five years.

On November 18, 2008, a Company A employee advised Company A’s CEO in an e-mail, “I talked to Tim today. He asked for a job.” Company A’s CEO then stated, “What about ethics…are we okay with all of that…he is a significant client…am sure you know the rules…gee he seems like a winner to me…I don’t think these guys are as expensive as one might think…and he has a military background[.]”

In December 2008 and January 2009, Cannon requested additional funding for the BEST Workforce Initiative. On January 6, 2009, in an e-mail to a Company A employee, Cannon stated, “[A]h yes, I got another 500k put on the contract. Cool huh?”

On January 12, 2009, Cannon had an employment interview with Company A in Washington, D.C. On February 9, 2009, Company A sent an employment offer letter by e-mail to Cannon. The letter offered Cannon “the opportunity to join [Company A] as a Partner with our Government Division in Washington, D.C.” and guaranteed him a minimum annual salary of $175,000 for the first two years of employment. Cannon responded to the e-mail the same day, stating, “I am very excited about joining [Company A] and I look forward to working with you….” Following Cannon’s acceptance of Company A’s employment offer, Cannon continued to oversee and work on the BEST Workforce Initiative at FEMA.

Cannon retired from FEMA effective on February 27, 2009. On his public financial disclosure report, known as Form SF-278, Cannon indicated that he did not have any agreements or arrangements for “future employment” and he specifically did not list his future employment with Company A. On February 27, 2009, Cannon requested that Company A provide him with an offer letter dated after February 27, 2009, so that it would falsely appear that Cannon received Company A’s employment offer after he had resigned from FEMA. On March 2, 2009, Company A sent an updated version of the offer letter, with the new date of March 2, 2009, to Cannon. Cannon signed this updated version of the offer letter on March 3, 2009, and returned it to Company A.

In March 2009, a Company A employee voiced concerns internally about Cannon’s hiring. In addition, on March 25, 2009, a Company A employee stated in an e-mail to another Company A employee, “Well, I just got a call from and am getting more red flags about Tim Cannon. Apparently, word is getting around about his departure and joining [Company A]. There is speculation among is [sic] co-workers that this is improper. They are pretty mad. This may get in the way of future business with FEMA….This, plus the bankruptcy, plus appearance of ethics violations, both on [Company A] and FEMA side. This is not good….I think we are getting too many sign[s], and I do not think this will work.” On March 26, 2009, Company A informed Cannon that Company A’s offer of employment was being withdrawn. Company A told Cannon that he did not meet the background check requirements.

Later, on September 17, 2009, Cannon sent an e-mail to Company A’s CEO advising that Cannon had joined a consulting firm and asking to have lunch. Company A’s CEO forwarded that e-mail to other Company A employees stating, “This is a guy that was our sponsor at FEMA…he is so [Company A] gung ho…when he was applying we broke some of the rules of the U.S. Gov on the ‘how’ we do it…so we had to let him go….”

In announcing the guilty plea, U.S. Attorney Machen, Assistant Attorney General Breuer, Acting Assistant Director in Charge Smith, Special Agent in Charge Cherry, and Special Agent in Charge Dawson commended the outstanding investigative work of agents of the FBI’s Washington Field Office, Assistant Special Agent in Charge Floyd Martinez of the GSA OIG and agents of the DHS OIG, as well as agents and auditors of other federal investigative agencies that assisted with this case. They also praised the efforts of members of the U.S. Attorney’s Office and the Criminal Division Fraud Section, including Paralegal Specialists Diane Hayes and Nicole Wattelet; Legal Assistant Jamasee Lucas; Information Technology Specialist Joshua Ellen; forensic accountants in the Fraud and Public Corruption Section; and Assistant U.S. Attorney David Johnson, Trial Attorney Brian Young, and former Trial Attorney James Graham, who have prosecuted the case.

11/3/1998 EDPA Historical Society Celebration of 50 Years of Antitrust Enforcement by the Philadelphia Field Office of the Antitrust Division

Later this month, four Antitrust Division field offices in Atlanta, Cleveland, Dallas and Philadelphia close their doors for good.  The link below hearkens back to happier day on November 3, 1998, when the Historical Society of the Eastern District of Pennsylvania honored and celebrated the Philadelphia Field Office’s 50th year of cartel enforcement

Please click the link below:

Historical Society Celebrates Philadelphia Field Office of the Antitrust Division


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