Category Archives: Criminal Investigation Division

Army National Guard Soldier Pleads Guilty to Role in Scheme to Defraud U.S. Army National Guard Bureau

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A U.S. Army National Guard soldier pleaded guilty for her role in a bribery and fraud scheme that caused $30,000 in losses to the U.S. Army National Guard Bureau.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.

Specialist Danielle Applin, 27, of Harker Heights, Texas, pleaded guilty to one count of conspiracy and one count of bribery.  The case against Applin arises from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses.  To date, the investigation has led to charges against 27 individuals, 20 of whom have pleaded guilty.

According to court documents filed in the case, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP).  The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard.  Through this program, a participating soldier could receive bonus payments for referring another individual to join the Army National Guard.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.  To participate in the program, soldiers were required to create online recruiting assistant accounts.

Applin admitted that she paid an Army National Guard recruiter for the names and Social Security numbers of potential Army National Guard soldiers.  Applin further admitted that she used the personal identifying information for these potential soldiers to claim that she was responsible for referring these potential soldiers to join the Army National Guard, when in fact she had not referred them.  As a result of these fraudulent representations, Applin collected approximately $13,000 in fraudulent bonuses.

The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.  The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.

Applin is scheduled to be sentenced before U.S. District Judge Lee H. Rosenthal in Houston on June 11, 2014.

This case is being investigated by the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit.  The case is being prosecuted by Trial Attorneys Sean F. Mulryne, Heidi Boutros Gesch, and Mark J. Cipolletti of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.

Army Soldier Sentenced on Bribery Charges for Facilitating Thefts of Fuel in Afghanistan

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A former U.S. Army soldier was sentenced to serve 87 months in prison for her role in stealing fuel at Forward Operating Base (FOB) Fenty, Afghanistan, Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division announced today.
Former U.S. Army Specialist Stephanie Charboneau, 35, of Colorado Springs, Colo., was sentenced on Feb. 3, 2014, by U.S. District Court Philip A. Brimmer.    Charboneau pleaded guilty on Sept. 5, 2013.
According to court documents, from approximately February through May 2010, Charboneau was 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 or mission sheets) were created to authorize the movement of fuel.
According to court documents, Charboneau conspired with others to steal and sell fuel.    The essence of the scheme was that the conspirators would create fraudulent TMRs that purported to authorize the transport of fuel from FOB Fenty to other military bases, even though no legitimate fuel transportation mission was required.    After the trucks were filled with fuel, the fraudulent TMRs were used by the drivers of the fuel trucks at FOB Fenty’s departure checkpoint to justify the trucks’ departures from FOB Fenty.    In truth, the fuel was simply stolen, and the conspirators would receive money from the trucking company that stole the fuel.
Charboneau pleaded guilty to bribery and conspiracy to commit bribery for having received payments from a representative of the trucking company in exchange for facilitating the theft of approximately 70 truckloads of fuel.   According to court documents, the loss to the United States as a result of the thefts was in excess of $1,225,000.
Charboneau’s plea was the fourth guilty plea arising from the investigation of fuel thefts at FOB Fenty.    On Aug. 3, 2012, Jonathan Hightower, a civilian employee of a military contractor who had conspired with Charboneau, pleaded guilty to similar charges.   After cooperating with the government, he was sentenced to serve 24 months in prison on Oct. 28, 2013.    On Oct.10, 2012, Christopher Weaver, who also conspired with Charboneau, pleaded guilty to fuel theft charges, and, after cooperating with the government, was sentenced to serve 37 months in prison on Oct. 28, 2013.   Both Weaver and Hightower were prosecuted in the United States District Court for the District of Colorado.    On Aug. 29, 2013, Sergeant Bilal Kevin Abduallah, who succeeded Charboneau at FOB Fenty, pleaded guilty in the United States District Court for the Western District of Kentucky to fuel theft-related charges.    His sentencing is set for Feb. 12, 2014.
The cases were investigated by the Special Inspector General for Afghanistan Reconstruction (SIGAR); the Department of the Army, Criminal Investigations Division (CID); the Defense Criminal Investigative Service; and the Federal Bureau of Investigation.
These cases were handled by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section, who is on detail from SIGAR.

Department of Defense Employee Pleads Guilty to Submitting False Claim for Housing Allowance

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A Department of Defense (DOD) employee has pleaded guilty to filing a false claim with the DOD while stationed in the Republic of Korea (ROK) to fraudulently obtain $64,000 in housing allowance, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Daniel G. Bogden of the District of Nevada.

Patrick Y. Kim, 56, of Reno, Nev., pleaded guilty today before U.S. District Judge Howard D. McKibben in the District of Nevada in Reno to one count of making a false claim.  Kim faces a maximum penalty of five years in prison when he is sentenced on Feb. 12, 2014.  As part of his plea agreement, Kim has agreed to pay full restitution to the DOD in the amount of $64,000.

The former chief of the Furniture Branch at the United States Army Garrison in Daegu, ROK, Kim admitted that he submitted a fraudulent lease to the housing office to obtain a living quarters allowance (LQA) that he was not entitled to receive.  Kim began working at Daegu Garrison in or about October 2002, and, as a DOD civilian employee working in the ROK, he was entitled to receive certain housing allowances, including LQA under certain circumstances.  To receive LQA, Kim was required to submit a copy of a housing lease in support of his application and acknowledge that the LQA payments were exclusively for the payment of rent and not for the payment of refundable security deposits or “key money” leases.  Key money leases – sums of money paid to a lessor in lieu of rent, which are returned to the lessee at the end of the lease – are common in the ROK; however, they are prohibited by State Department regulations.

Kim admitted that in September 2008, he was looking for a new apartment as the lease for his current apartment was about to expire.  He and his wife located a residence at an apartment complex; however, the owners of the apartments did not offer traditional rental leases – only key money leases and purchases.  On or about Sept. 8, 2008, Kim’s wife entered into a key money lease for one of the apartments.  Kim admitted that he knew that State Department regulations prohibited him from receiving LQA to pay for the key money lease signed by his wife.  On or about Sept. 9, 2008, Kim created a fake rental lease for the subject property and submitted it to the housing office at Daegu Garrison in support of his request for LQA.  The fake lease for the apartment purported to be a two-year lease with a total cost of $64,000.  Kim admitted receiving $64,000 in LQA, which is non-taxable, and also admitted that he used the money to pay for a portion of the key money lease entered into by his wife.

Kim also admitted that he created a fake receipt for the purported $64,000 rental payment and submitted it to the housing office at Daegu Garrison to justify his receipt of the LQA.  He received the $64,000 back at the end of the key money lease in 2010, and he used it for the purchase of a new residence in the ROK.

The case is being investigated by the U.S. Army Criminal Investigation Division and the FBI.  The case is being prosecuted by Trial Attorney Richard B. Evans of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Sue P. Fahami of the District of Nevada.

Iraqi-Based Construction Company Pays $2.7 Million to U.s. for Alleged False Claims in Bribery Scheme

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Iraqi Consultants and Construction Bureau (ICCB) has paid the U.S. $2.7 million to resolve allegations that it violated the False Claims Act by bribing a U.S. government official to obtain U.S. government contracts in Iraq, the Department of Justice announced today.  ICCB is a privately owned construction company headquartered in Baghdad, Iraq.

“Bribery will not be tolerated in government contracting,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “We will ensure that government contracts are awarded based on merit and pursue allegations of fraudulently procured contracts wherever they occur.”

The government alleged that, from 2007 to 2008, ICCB paid bribes to Army Corps of Engineers procurement official John Salama Markus, 41, of Nazareth, Pa., to obtain information that gave it an advantage in bidding on several construction contracts with the Department of Defense in Iraq.  The contracts supported reconstruction efforts involving the Iraq war, including infrastructure and security projects and the building of medical facilities and schools.  ICCB then knowingly overcharged the U.S. for services provided under the contracts, according to the government’s allegation.

“It is offensive that anyone would see projects to promote stability, health and education in a rebuilding country as a way to make illegal cash on the side,” said U.S. Attorney for the District of New Jersey Paul J. Fishman.  “We will not abide companies paying to play in such a system.”

“The Defense Criminal Investigative Service (DCIS) is committed to protecting the integrity of the Defense acquisition process from personal and corporate avarice,” said Special Agent in Charge, DCIS Northeast Field Office Craig Rupert.  “Ensuring the proper use of U.S. taxpayers’ dollars and preventing contract fraud is in our nation’s interest and remains a priority.”

The settlement is part of a larger investigation initiated by the U.S. Attorney’s Office for the District of New Jersey.  As part of that investigation, Markus pleaded guilty on Sept. 7, 2012, to wire fraud, money laundering and failure to report a foreign bank account in connection with more than $50 million in contracts awarded to foreign companies in Gulf Region North, Iraq.  Markus was sentenced to 13 years in prison on March 12, 2013, in Newark, N.J., federal court.

The investigation is being handled by the U.S. Attorney’s Office for the District of New Jersey and the Civil Division’s Commercial Litigation Branch, in cooperation with the Defense Criminal Investigative Service, the Major Procurement Fraud Unit of the Army’s Criminal Investigation Command, the Criminal Investigative Division of the Internal Revenue Service and the Department of Homeland Security.  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Two Army National Guard Soldiers Plead Guilty to Schemes to Defraud U.s. Army National Guard Bureau

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Two current U.S. Army National Guard soldiers have pleaded guilty for their role in bribery and fraud schemes that caused a total of at least $70,000 in losses to the U.S. Army National Guard Bureau.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Kenneth Magidson of the Southern District of Texas made the announcement.

Sergeant Annika Chambers, 28, of Houston, pleaded guilty today to one count of conspiracy and one count of bribery. Specialist Elisha Ceja, 27, of Barboursville, W.V., previously pleaded guilty to the same charge on Oct. 1, 2013. The cases against both defendants arise from an investigation involving allegations that former and current military recruiters and U.S. soldiers in the San Antonio and Houston areas engaged in a wide-ranging corruption scheme to illegally obtain fraudulent recruiting bonuses.  To date, the investigation has led to charges against 25 individuals, 17 of whom have pleaded guilty.

According to court documents filed in both cases, in approximately September 2005, the National Guard Bureau entered into a contract with Document and Packaging Broker, Inc. (Docupak) to administer the Guard Recruiting Assistance Program (G-RAP).  The G-RAP was a recruiting program that offered monetary incentives to soldiers of the Army National Guard who referred others to join the Army National Guard.  Through this program, a participating soldier could receive up to $3,000 in bonus payments for referring another individual to join.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive payment through direct deposit into the participating soldier’s designated bank account.  To participate in the program, soldiers were required to create online recruiting assistant accounts.

Ceja and Chambers both admitted that they paid Army National Guard recruiters for the names and Social Security numbers of potential Army National Guard soldiers.  They further admitted that they used the personal identifying information for these potential soldiers to falsely claim that they were responsible for referring the potential soldiers to join the Army National Guard.

As a result of these fraudulent representations, Ceja collected approximately $12,000 in fraudulent bonuses, and Chambers collected approximately $17,000 in fraudulent bonuses.  The charge of bribery carries a maximum penalty of 15 years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.  The charge of conspiracy carries a maximum penalty of five years in prison and a maximum fine of $250,000 or twice the pecuniary gain or loss.

Ceja and Chambers are scheduled to be sentenced before U.S. District Judge Lee H. Rosenthal in Houston on Dec. 19, 2013, and March 11, 2013, respectively.

These cases are being investigated by Special Agents from the San Antonio Fraud Resident Agency of Army Criminal Investigation Command’s Major Procurement Fraud Unit. The cases are being prosecuted by Trial Attorneys Sean F. Mulryne, Mark J. Cipolletti, and Heidi Boutros Gesch of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney John Pearson of the Southern District of Texas.

Former Army National Guard Soldier Sentenced to 57 Months in Prison for Lead Role in Fraudulent Military Recruiting Referral Bonus Scheme

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A former member of the U.S. Army National Guard was sentenced today to serve 57 months in prison for leading a conspiracy to obtain approximately $244,000 in fraudulent recruiting referral bonuses from various U.S. military components and their contractor, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division.

Former U.S. Army National Guard Specialist Xavier Aves, 42, of San Antonio, was sentenced by Chief U.S. District Judge Fred Biery in the Western District of Texas.  In addition to his prison term, Chief Judge Biery sentenced Aves to serve three years of supervised release and ordered Aves to pay $244,000 in restitution, jointly and severally with co-conspirators.

On Sept. 16, 2011, a grand jury in the Western District of Texas returned a 41-count indictment against Aves and five co-defendants, in which Aves was charged with one count of conspiracy to commit wire fraud, 30 counts of wire fraud and 10 counts of aggravated identity theft.

On Feb. 3, 2012, Aves pleaded guilty to one count of conspiracy to commit wire fraud and one count of aggravated identity theft.

The case against Aves and his co-defendants arose from an investigation concerning allegations that former and current soldiers and military and civilian contract recruiters in the San Antonio area engaged in a wide-ranging scheme to obtain fraudulent recruiting referral bonuses.  To date, 11 individuals have been charged, 10 of whom have pleaded guilty and been sentenced.  The investigation is ongoing.

According to court documents, between 2005 and 2008, the U.S. Army, the U.S. Army Reserves and the National Guard Bureau entered into contracts with Document and Packaging Broker Inc. to administer recruiting bonus programs designed to offer monetary incentives to soldiers who referred others to serve in the U.S. military.  In addition, the Army managed its own recruiting bonus programs, which offered referral bonuses to soldiers who referred other individuals to serve in the Army or Army Reserves after registering online as recruiting assistants (RA) or sponsors.

Through these recruiting programs, a participating soldier could receive up to $2,000 in bonus payments for every person he referred to join the U.S. military.  Based on certain milestones achieved by the referred soldier, a participating soldier would receive the recruiting bonus payments in the form of direct deposits and pre-paid debit card payments.

According to court documents, between February 2006 and February 2011, Xavier Aves, Christopher Castro, Grant Bibb, Paul Escobar, Richard Garcia, Ernest Gonzales and others paid military recruiters, including Jesus Torres-Alvarez, for the names and social security numbers of potential soldiers.  Aves, Castro, Bibb, Escobar, Garcia, Gonzales and others used the information they obtained from recruiters to claim credit in their online RA and sponsor accounts for referring certain new soldiers to join the military, when in fact they did not refer those individuals.

Aves orchestrated the scheme by serving as a key intermediary between the recruiters and the participating RAs.  Aves arranged for the money to be split among his co-conspirators and directed a portion of the proceeds to be wired to his and his girlfriend’s personal bank accounts.

As a result of the fraudulent referrals, Aves and his co-conspirators received a total of approximately $244,000 in fraudulent recruiting bonuses.

The case is being prosecuted by Trial Attorneys Edward J. Loya Jr., Brian A. Lichter, Mark J. Cipolletti and Sean F. Mulryne of the Criminal Division’s Public Integrity Section.  The case is being investigated by agents from the San Antonio Fraud Resident Agency of the Major Procurement Fraud Unit, U.S. Army Criminal Investigation Division.