Three Georgia Residents Sentenced for Their Roles in Bribery Scheme Related to the Award of Government Contracts

A former employee at the Marine Corps Logistics Base Albany (MCLB-Albany) and two local businessmen were sentenced today for their roles in a bribery scheme related to the award of contracts for machine products that resulted in approximately $907,000 in fraudulent overcharges to the U.S. Marines, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore of the Middle District of Georgia.

Michelle Rodriguez, 32; Thomas J. Cole, 43; and Fredrick W. Simon, 55, all of Albany, Ga., were sentenced today by U.S. District Judge W. Louis Sands in the Middle District of Georgia.  Rodriguez was sentenced to 70 months in prison and ordered to pay $161,000 in restitution; Cole was sentenced to 46 months in prison and ordered to pay $209,000 in restitution; and Simon was sentenced to 32 months in prison and ordered to pay $74,500 in restitution.  Each is also subject to a $907,000 forfeiture order and three years of supervised release.

During her guilty plea in February 2013, Rodriguez, a supply technician in the Maintenance Center Albany (MCA), admitted to participating in a scheme to award contracts for machine products to Company A and Company B, companies operated by Cole and Simon. Cole and Simon pleaded guilty to bribery charges related to the same scheme in January 2013 and cooperated with the government’s criminal investigation.  The MCA is responsible for rebuilding and repairing ground combat and combat support equipment, much of which has been utilized in military missions in Afghanistan and Iraq, as well as other parts of the world.  To accomplish the scheme, Rodriguez would transmit bid solicitations to Simon via facsimile or email, and then usually follow that communication with a text message specifying how much Company A should bid.  Simon, on Company A’s behalf, and with Cole’s knowledge, bid the amount specified by Rodriguez on each order, which was normally in excess of fair market value.  Rodriguez was then paid $75 in cash for each order awarded to Simon and Cole during the previous week.  According to court records, during the relevant period Rodriguez awarded Cole and Simon’s companies nearly 1,300 machine product orders, all of which were in exchange for bribes paid to Rodriguez.

Rodriguez further admitted that in 2011, she began routing some orders through a second company, Company B, owned by Cole, because the volume of orders MCA placed with the first company was so high. Company A, however, continued to perform the required services. Court records state that Rodriguez received approximately $161,000 in bribes during the nearly two-year scheme, while Cole and Simon personally received $209,000 and $74,500, respectively.  Court records also indicate that the total loss to the U.S. Marines from overcharges associated with the machine product orders placed during the scheme was approximately $907,000.

The case was investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit and the Defense Criminal Investigative Service.  The case was prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.

Georgia Men Plead Guilty to Receiving Bribes in Transportation Scheme at Local Military Base

Two former employees at the Marine Corps Logistics Base Albany (MCLB-Albany) have pleaded guilty to receiving bribes related to a scheme to funnel freight hauling business to a local transportation company resulting in the loss of millions of dollars to the United States government, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Mitchell D. Potts, 48, and Jeffrey S. Philpot, 35, both of Sylvester, Ga., each pleaded guilty today before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.

During their guilty pleas, Potts, the former Traffic Office Supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, and Philpot, the former Lead Transportation Assistant in the Traffic Office, admitted to participating in a scheme whereby Potts and Philpot assisted Person A, the owner of several local commercial trucking companies, in obtaining trucking business from the DLA in exchange for the payment of cash and other things of value.  Both defendants admitted that they took a variety of steps designed to push business to Person A and his companies, including: 1) delaying shipments for a period of hours or days, thereby reducing the time available to fulfill the shipping request and assuring that it would be awarded to a local trucking company, usually one owned by Person A; 2) “short loading” shipments awarded to Person A’s companies so that it would appear to require more trucks than necessary to move the subject freight, resulting in additional loads being awarded to Person A’s companies; 3) indicating that removable gooseneck (RGN) trailers were required for shipments, which resulted in many loads being directed to Person A’s companies because they always had RGNs available; and 4) creating “ghost shipments” where Person A billed the DLA for shipments that were never made.  Both Potts and Philpot admitted that their actions led to millions of dollars of overcharges to the government.

Potts and Philpot admitted that they received cash payments from Person A when he visited the traffic office, sometimes multiple times per week.  They also admitted receiving lunches provided by Person A several times a week during the relevant period and that they also received gift cards and other things of value.  Potts admitted receiving approximately $209,000 in kickbacks from Person A during the roughly three-year scheme.  Philpot admitted receiving approximately $523,000 in cash and other things of value from Person A during the same period.

At sentencing, Potts and Philpot each face a maximum penalty of 15 years in prison and a fine of not more than twice the pecuniary loss to the government.  As part of their plea agreements with the United States, both Potts and Philpot have agreed to forfeit the bribe proceeds they received from the scheme, as well as to pay full restitution to the Department of Defense.  Sentencing is scheduled for Aug. 15, 2013.

The case is being investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney’s Office Economic Crime Unit, the Defense Criminal Investigative Service, and the Defense Logistics Agency Office of the Inspector General. The case is being prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.