Category Archives: Defense Criminal Investigative Service

Georgia Man Admits Taking Bribes to Allow $1 Million Theft of Government Equipment from Marine Base

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A retired employee of the Marine Corps Logistics Base Albany (MCLB-Albany) pleaded guilty today to receiving bribes in exchange for allowing heavy equipment to be stolen from the base for resale, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Shelby C. Janes, 67, of Albany, Ga., pleaded guilty before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.

During his guilty plea, Janes, the former civilian inventory control manager of the distribution management center at MCLB-Albany, admitted to participating in a scheme in which he assisted an individual, referred to in court documents as “Person A,” in stealing heavy equipment – such as cranes, bulldozers and front-end loaders – from the base.  Person A, the owner of a commercial trucking business that was routinely contracted by the MCLB’s Defense Logistics Agency, then arranged to sell the equipment to private purchasers.

According to court documents, while working at the distribution management center, Janes was responsible for supervising a number of employees in the inventorying of obsolete equipment returning from the Fleet Marine Corps.  This equipment was sent to MCLB-Albany for one of two purposes: to be demilitarized and disposed of through eventual sale or destruction, or to be rehabilitated, repaired and redistributed to the Fleet Marine Corps.  To accomplish the theft scheme, Janes and one of his employees, referred to in court documents as “Public Official A,” facilitated the theft of the equipment, including by letting the equipment be driven off the base.  Janes admitted that to facilitate the unlawful removal of the equipment, he typically prepared a false DD Form 1348 authorizing the Defense Logistics Agency to release the equipment to Person A, and that the equipment was then sold to private purchasers for tens of thousands of dollars.

Janes also admitted that he received payments from Person A after the sale of the stolen equipment, often delivered to him by Public Official A on behalf of Person A in the form of a check or cash, totaling approximately $98,500 during the approximately 15-month scheme.  Janes admitted that the total loss to the Department of Defense from the theft of government equipment was approximately $1,075,000.

At sentencing, Janes faces a maximum potential penalty of 15 years in prison and a fine of twice the gain or loss from the offense.  As part of his plea agreement with the United States, Janes agreed to forfeit the bribe proceeds he received from the scheme, as well as to pay full restitution to the Department of Defense.  A sentencing date has not yet been set.

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

Georgia Men Plead Guilty to Bribing Official to Secure Government Contracts Defendants Admit to Overcharging Defense Department More Than $900,000

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WASHINGTON – Two men employed by a machine products vendor in Albany, Ga., have pleaded guilty to bribing a public official working for a military organization at the Marine Corps Logistics Base Albany (MCLB-Albany) to secure contracts for machine products, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Thomas J. Cole Jr., 43, and Fredrick W. Simon, 55, both of Albany, each pleaded guilty 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, Cole, the general manager of an Albany-based machine products vendor, and Simon, an employee responsible for processing sales orders, admitted to participating in a scheme to secure sales order contracts from the Maintenance Center Albany (MCA) at MCLB-Albany by subverting a competitive bid process.  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, Cole and Simon bribed a MCA purchase tech responsible for placing machine product orders.  Cole and Simon admitted to participating in the scheme at the purchase tech’s suggestion, after Simon had spoken with the purchase tech about how his company could obtain business from the MCA.  Cole and Simon admitted that, at the purchase tech’s request, they paid the purchase tech a bribe of at least $75 for each of the more than 1,000 sales orders MCA placed with their company.  According to court documents, the purchase tech would transmit sales bids to Simon and then communicate privately to him exactly how much money the company should bid for each particular order.  Cole and Simon admitted that these orders were extremely profitable, often times exceeding the fair market value of the machine products, sometimes by as much as 1,000 percent.

Cole and Simon further admitted that, at the purchase tech’s urging, in 2011 they began routing some orders through a second company, owned by Cole, because the volume of orders MCA placed with the first company was so high.  They also admitted that the purchase tech increased the bribe required for orders as the scheme progressed.  Cole and Simon admitted to paying the purchase tech approximately $161,000 in bribes during the nearly two-year scheme.  Cole admitted to personally receiving approximately $209,000 in proceeds from the scheme; Simon admitted to personally receiving approximately $74,500.  Both admitted that the total loss to the Department of Defense from overcharges associated with the machine product orders placed during the scheme was approximately $907,000.

At sentencing, Cole and Simon 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, Cole and Simon both agreed to forfeit the proceeds they received from the scheme, as well as to pay full restitution to the Department of Defense.  Sentencing has not yet been scheduled.

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.  The case is being 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.

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

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WASHINGTON – Caddell Construction Company Inc., a major commercial and industrial federal government construction contractor based in Montgomery, Ala., has entered into an agreement with the Department of Justice to resolve criminal fraud violations arising from Caddell’s intentional overstating of developmental assistance provided to a disadvantaged small business as part of a Department of Defense (DoD) program.  The agreement, including a $2 million penalty to be paid by Caddell, was announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

According to the non-prosecution agreement (NPA) between the government and Caddell, in February 2003, Caddell entered into an agreement with Mountain Chief – which is certified as a Native American, woman-owned and economically-disadvantaged small business – to participate in the DoD’s Mentor-Protégé Program, in which major DoD contractors (mentor firms) contract with and provide developmental assistance to disadvantaged small businesses (protégé firms) and are reimbursed by the DoD for related costs.

Around the same time, Caddell began participating with Mountain Chief in DoD’s Indian Incentive Program, which provides incentives – in the form of a rebate of 5 percent of the total dollar amount of work – for major DoD contractors to engage Native-American-owned businesses as subcontractors and suppliers.  Caddell and Mountain Chief participated in these programs in connection with two DoD construction contracts at Fort Bragg, N.C., each worth approximately $65 million and a DoD construction project at Fort Campbell, Ky., worth approximately $34 million.

According to the NPA, from February 2004 to March 2005, Caddell submitted more than 20 requests for payment to the DoD in connection with the Mentor-Protégé Program that significantly overstated the amount of developmental assistance Caddell had provided Mountain Chief.  In addition, Caddell filed documents falsely stating Mountain Chief’s size and income, as well as the status of Mountain Chief’s technical capabilities and business infrastructure.  From April 2003 to October 2004, Caddell also submitted at least eight requests to the DoD for the Indian Incentive Program, for rebates based on services purportedly performed on subcontracts Caddell gave to Mountain Chief.  Mountain Chief performed few, if any of these services, and the invoices were created solely to support Caddell’s applications for payment.

As part of the NPA, Caddell will pay a $2 million criminal penalty, and must cooperate with the Department of Justice for the two-year term of the agreement.  The agreement recognizes Caddell’s voluntary disclosure; thorough self-investigation of the underlying conduct; and full cooperation with the department and remedial measures already undertaken and to be undertaken, including employment actions and improving reporting systems, corporate governance, and compliance training and oversight.  As a result of these factors, among others, the department agreed not to prosecute Caddell for the improper pay requests, provided Caddell satisfies its ongoing obligations under the agreement.

In January 2012, Daniel W. Chattin, 50, of Granite Bay, Calif., the son of Mountain Chief’s owner and a project manager and consultant for Mountain Chief, and Mark L. Hill, 57, of Montgomery, Ala., the Mentor-Protégé Program Coordinator and a director of business development at Caddell, were indicted in the Middle District of Alabama on three counts of major fraud against the United States stemming from the same scheme.  In addition, Hill was charged with one count of making a false statement to the DoD.  Chattin and Hill await trial, which is scheduled to begin on April 22, 2013.  The charges and allegations against Chattin and Hill are merely accusations and they are considered innocent unless and until proven guilty.

This investigation is being conducted by the General Services Administration – Office of Inspector General, and the DoD’s Defense Criminal Investigative Service.  This case is being handled by Assistant Chief Albert B. Stieglitz Jr. and Trial Attorney Thomas B.W. Hall of the Criminal Division’s Fraud Section.

British Contractor Agrees to Plead Guilty to Wire Fraud Conspiracy Related to Iraq Reconstruction Efforts

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FOR IMMEDIATE RELEASE
Monday, December 10, 2012
British Contractor Agrees to Plead Guilty to Wire Fraud Conspiracy Related to Iraq Reconstruction Efforts

WASHINGTON – British contractor APTx Vehicle Systems Limited agreed today to plead guilty to conspiracy to defraud the United States, the Coalition Provisional Authority that governed Iraq from April 2003 to June 2004, the government of Iraq and JP Morgan Chase Bank.  A civil settlement agreement resolving a related action filed under the False Claims Act was also announced today.

APTx was charged with one count of wire fraud conspiracy in a criminal information filed today in U.S. District Court in Massachusetts.  As part of the plea agreement filed with the information, APTx agreed to pay a criminal fine of $1 million.

The charges and resolutions were announced today by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division, Principal Deputy Assistant Attorney General Stuart F. Delery of the Justice Department’s Civil Division and U.S. Attorney for the District of Massachusetts Carmen M. Ortiz.

According to the criminal information, APTx engaged in a fraudulent scheme involving an August 2004 contract valued at over $8.4 million for the procurement of 51 vehicles for the Iraqi Police Authority.  The contract was initially awarded to a different, “prime” contractor, which in turn subcontracted the procurement to APTx for over $5.7 million.  Payment under the contract was by letters of credit issued by JP Morgan Bank.

The criminal information further charges that in May and June 2005, APTx submitted shipping documents to JP Morgan to draw down on the letters of credit, which falsely and fraudulently asserted that all 51 vehicles were produced and ready to ship to Iraq.   In fact, as APTx knew, none of the vehicles had been built, none of the vehicles were legally owned or held by APTx and none of the vehicles were in the process of transport to Iraq.  The fraudulent shipping documents also listed a company as the freight carrier that APTx knew was not a shipping company and named a fictitious company as the freight forwarder.

In a related civil settlement agreement, APTx, along with Alchemie Grp Ltd., a United Kingdom corporation, and Haslen Back, the director and shareholder of Alchemie, agreed to pay $2 million to the United States to resolve claims originated by Ian Rycroft, an individual retained by the prime contractor to oversee transportation of the vehicles, under the qui tam, or whistleblower, provisions of the False Claims Act in the District of Massachusetts.  The False Claims Act authorizes private whistleblowers to bring suit for false claims submitted to the United States and to share in any recovery.  Rycroft’s estate will receive $540,000 as its share of the settlement amount.

Benjamin Kafka, a representative for APTx in the United States, was charged on April 13, 2009, with one count of misprision of a felony in connection with his role in the wire fraud conspiracy.  According to court documents, Kafka allegedly allowed APTx to use his corporate name and identity as the freight carrier and freight forwarder on the fraudulent shipping documents presented to JP Morgan.

The criminal case is being prosecuted by Director of Procurement Fraud Catherine Votaw and Trial Attorney William H. Bowne III of the Criminal Division’s Fraud Section, and by Assistant U.S. Attorneys Eugenia M. Carris and Jeffrey Cohen of the District of Massachusetts.  The civil case is being handled by Trial Attorney Diana Younts of the Civil Division, and by Assistant U.S. Attorney Christine Wichers of the District of Massachusetts.  The investigation was conducted by the Special Inspector General for Iraq Reconstruction, the Defense Criminal Investigative Service Boston Resident Agency and U.S. Immigration and Customs Enforcement Homeland Security Investigations in Washington, D.C.

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

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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

Kentucky-based Lusk Mechanical Contractors and Commonwealth Technologies, and their owners, Harry Lusk and Wendell Goodman, have agreed to pay $6.25 million to resolve allegations that they submitted false statements to the Small Business Administration and false claims to the Army, the Justice Department announced today.

 

Congress established the Historically Underutilized Business Zone (HUBZone) program in 1997 to help inner cities and rural counties that have low household income and high unemployment, and whose communities have suffered from a lack of investment.   Under the HUBZone program, small businesses that maintain their principal office in a designated HUBZone, and meet certain other requirements, can apply to the Small Business Administration (SBA) for certification as a HUBZone company.  HUBZone companies can then use this certification to their advantage when bidding on government contracts.

 

Today’s settlement resolves allegations that Lusk Mechanical, Commonwealth Technology and their owners made, or caused to be made, false statements to the SBA to obtain certification as a HUBZone company, and then used this certification to wrongfully obtain Army contracts to build a courthouse in Fort Knox, Ky., and to complete maintenance and other repairs to Army facilities in Fort Knox.   Specifically, the United States alleged that in February 2005, Commonwealth submitted an application to the SBA representing that it was a small business with its principal place of business in a designated HUBZone.   In fact, Commonwealth allegedly operated out of Lusk Mechanical’s headquarters, which was not located in a HUBZone area.  Commonwealth’s business office was identified on the application as 212 East Caroline Street, Irvington, Ky.   The United States alleged that this location was nothing more than a vacant office space with no employees, and that Commonwealth’s application did not disclose that Wendell Goodman and Harry Lusk were, in fact, affiliated with Lusk Mechanical.   At the time, Harry Lusk and his wife were the sole owners of Lusk Mechanical and Wendell Goodman was the chief executive officer of Lusk Mechanical.   According to the United States’ allegations, neither Lusk nor Goodman disclosed in the application to the SBA that Commonwealth did not operate as an independent company, but instead shared facilities, equipment, personnel, insurance and bonding with Lusk Mechanical, nor did they inform the SBA about the financial relationship between Commonwealth and Lusk Mechanical.  The United States alleged that, using the falsely obtained HUBZone certification, the companies obtained contracts from the Army that had been restricted to qualified HUBZone companies, in violation of the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).

 

Under the terms of the settlement, Commonwealth, Lusk Mechanical, Goodman, and Lusk have agreed to pay $3,741,739.96, and to forfeit $2,506,260.24 seized by federal agents from their bank accounts under a civil forfeiture action.

 

“As our economy continues to improve, the HUBZone program provides a critical lifeline to small businesses that voluntarily choose to locate in areas that often have difficulty attracting business,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division.   “Companies that set up sham offices not only break the law, but deprive the HUBZone communities and legitimate HUBZone businesses of the benefits of the HUBZone program.”

 

“They abused a program meant to assist small businesses located in financially disadvantaged communities,” stated David J. Hale, U.S. Attorney for the Western District of Kentucky. “Today’s multimillion dollar settlement is the result of a successfully coordinated effort among law enforcement agencies and the Department of Justice, working together to hold these business owners accountable.”

 

“The HUBZone Program offers significant benefits to eligible small businesses and is an important tool for unlocking the potential of historically underutilized business zones,” said Inspector General Peggy E. Gustafson of the Small Business Administration. “Preferences for federal contract awards must not be given to persons who lie in order to claim eligibility.   I applaud the dedication and perseverance of our law enforcement partners as justice is served here today on behalf of the American taxpayer”

 

“SBA’s contracting programs, including the HUBZone program, provide small businesses with the opportunity to grow and create jobs,” stated SBA’s General Counsel Sara Lipscomb.  “But, SBA has no tolerance for waste, fraud or abuse in any government contracting program and is committed to ensuring the benefits of these programs flow to the intended recipients.  SBA works closely with our federal partners to prevent bad actors from participating in contracting programs and taking action and holding those accountable when they lie to or mislead the government.”

“This investigation is the result of a highly successful joint effort by the Defense Criminal Investigative Service (DCIS) and one of our key law enforcement partners — the SBA’s Office of Inspector General, in collaboration with the Department of Justice.   Fraud in military contracting undermines the confidence of the American public who demand a military procurement system that spends their tax dollars wisely and responsibly.   This investigation should serve as a warning for those who submit false claims for U.S. military and public funds that DCIS will aggressively investigate these matters,” said Bret Flinn, Resident Agent in Charge of the DCIS Dayton Resident Agency.

 

Principal Deputy Assistant Attorney General Delery thanked the U.S. Attorney’s Office for the Western District of Kentucky, the Office of General Counsel and the Office of the Inspector General for the Small Business Administration, the Defense Criminal Investigative Service, and the Justice Department’s Commercial Litigation Branch for the collaboration that resulted in today’s settlement.   The claims settled by this agreement are allegations only, and there has been no determination of liability.

Baylor University Medical Center to Pay More Than $900,000 for False Medicare Claims for Radiation Oncology Services

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Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, November 27, 2012
Baylor University Medical Center to Pay More Than $900,000 for False Medicare Claims for Radiation Oncology Services

 

Baylor University Medical Center, Baylor Health Care System and HealthTexas Provider Network (collectively, Baylor) have agreed to pay the United States $907,355 to settle allegations that Baylor submitted false claims to Medicare, the Civilian Health and Medical Program of the Uniformed Services (TRICARE) and the Federal Employees Health Benefit Program (FEHBP) for various radiation oncology services, including intensity modulated radiation therapy, the Justice Department announced today. Intensity modulated radiation therapy is a sophisticated radiation treatment indicated for specific types of cancer where extreme precision is required to spare patients’ surrounding organs or healthy tissue.

The government alleges that Baylor submitted improper claims to Medicare from 2006 through May 2010 in which Baylor double billed Medicare for several procedures affiliated with radiation treatment plans, billed for certain high reimbursement radiation oncology services when a different, less expensive service should have been billed, billed for procedures without supporting documentation in the medical record, and improperly billed for radiation treatment delivery without corroboration of physician supervision.

“Physicians who participate in Medicare must bill for their services accurately and honestly,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Justice Department’s Civil Division. “The Department of Justice is committed to ensuring that federal health care funds are spent appropriately.”

Principal Deputy Assistant Attorney General Delery also noted that the settlement with Baylor was the result of a coordinated effort among the Justice Department’s Civil Division, the U.S. Attorney’s Office for the Northern District of Texas, the Department of Health and Human Services’ Office of Inspector General, FBI and Defense Criminal Investigative Services.

 

U.S. Attorney for the Northern District of Texas Sarah R. Saldaña praised these investigative efforts and said, “this civil recovery is a testament to the efforts of the Department of Justice to hold all parties, regardless of position, accountable for the submission of improper claims to federal health care programs.”

This resolution is part of the government’s emphasis on combating health care fraud and another step for the Health Care Fraud Prevention and Enforcement Action Team (HEAT) initiative, which was announced by Attorney General Eric Holder and Kathleen Sebelius, Secretary of the Department of Health and Human Services in May 2009. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in that effort is the False Claims Act, which the Justice Department has used to recover $10.1 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 are over $13.8 billion.

The claims settled by this a gre ement are alle gations onl y, and the re has b een no det ermination of liability.

Former U.S. Army Major Sentenced to 18 Months in Prison for Bribery Scheme Related to Department of Defense Contracts in Kuwait

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Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Tuesday, November 13, 2012
Former U.S. Army Major Sentenced to 18 Months in Prison for Bribery Scheme Related to Department of Defense Contracts in Kuwait
To Date, 19 Individuals Have Pleaded Guilty or Been Convicted at Trial in Ongoing Corruption Investigation

WASHINGTON – A former U.S. Army Major was sentenced today to 18 months in prison for his participation in a bribery scheme related to his activities as a contracting official in Camp Arifjan, Kuwait, in 2005 and 2006, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

 

James Momon Jr., 40, of Alexandria, Va., was sentenced today by U.S. District Judge Emmet G. Sullivan in the District of Columbia.   In addition to his prison term, Momon was sentenced to serve three years of supervised release and pay $5.8 million in restitution, jointly and severally with co-defendants.

 

Momon pleaded guilty on Aug. 13, 2008, to two counts of bribery and one count of conspiracy.

 

According to plea documents, Momon, was involved in a criminal conspiracy to accept cash bribes from multiple U.S. Department of Defense (DoD) contracting firms that supplied bottled water and other goods and services to U.S. military bases in Kuwait.   In return, Momon assisted in the award of contracts as well as blanket purchase agreements (BPA) – contracts that allow DoD to order supplies on an as-needed basis at a pre-negotiated price.   Momon agreed to accept approximately $5.8 million from his co-conspirators as payment for his actions, including $1.6 million in cash and luxury items.

 

According to plea documents, Momon took over contracting duties at Camp Arifjan from former U.S. Army Major John C. Cockerham, who served as a contracting official in Kuwait in 2004 and 2005.  Cockerham, who solicited and received bribes from DoD contractors in exchange for contracts and BPAs for bottled water and other goods and services, pleaded guilty for his role in the conspiracy in February 2008 and was sentenced to serve 210 months in prison and ordered to pay $9 million in restitution.

 

To date, a total of 19 individuals have pleaded guilty or been convicted at trial in the ongoing investigation of corrupt contracting at Camp Arifjan.

 

This case was prosecuted by Trial Attorneys Peter C. Sprung, Eric G. Olshan, Edward J. Loya Jr. and Timothy J. Kelly of the Criminal Division’s Public Integrity Section.   The case is being investigated by special agents of the Defense Criminal Investigative Service, the Army Criminal Investigation Command Division, Internal Revenue Service-Criminal Investigation, the FBI and the Special Inspector General for Iraqi Reconstruction.

Former Employee of Army Contractor Pleads Guilty to Bribery

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Wednesday, October 24, 2012
Former Employee of Army Contractor Pleads Guilty to Bribery for Facilitating Theft by Trucking Contractor in Afghanistan

WASHINGTON – A Houston woman pleaded guilty today to bribery charges for her role in a scheme to fraudulently bill the U.S. Army for trucking services in Afghanistan, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division.

Diyana Montes, 29, pleaded guilty before U.S. District Judge James E. Boasberg in the District of Columbia to one count of bribery.

According to court documents, from approximately April 2008 through December 2008, Montes was an employee of Kellogg, Brown and Root (KBR), a private contractor with operations in Afghanistan. Montes worked at Bagram Airfield, Afghanistan, where KBR held a contract with the United States.

KBR’s contract involved providing services to the Army’s Movement Control Branch (MCB). The MCB’s mission was to contract with local Afghan trucking companies to transport U.S. military equipment, fuel and other supplies throughout Afghanistan. As part of this mission, the MCB coordinated requests from various U.S. military units for trucking services and assigned those requests to particular contractors. Each trucking request generated various specific documents, including “transportation movement requests” (TMR), which authorized the use of trucks.

According to court documents, Montes’s duties included receiving TMRs from various contractors and reconciling any discrepancies between the amount of services described in the TMRs and the amount of services the contractors claimed in their invoices. Once Montes reviewed the documents and determined they were accurate, she would pass them on to other contracting personnel, who would rely on her review in approving payments to the trucking company.

On numerous occasions, according to court documents, Montes received and reviewed TMRs and invoices for services allegedly provided by Afghanistan Trade Transportation (ATT), a trucking company contracted by the U.S. Army, that fraudulently represented that ATT provided services that Montes knew were not in fact performed. According to Montes’s plea agreement, she knew the invoices from ATT contained service claims that were not accurate, and she passed them along for payment with the knowledge that the billings were fraudulent.

According to her plea agreement, from approximately May 2008 through December 2008, in return for her knowingly handling the fraudulent TMRs and invoices, Montes received from ATT approximately $50,000, consisting of $35,000 wired to her personal bank account in the United States and another $15,000 in cash paid to her on several occasions in Afghanistan.

This case is being prosecuted by Special Trial Attorney Mark H. Dubester of the Criminal Division’s Fraud Section and former Fraud Section Trial Attorney Mark Pletcher, currently of the U.S. Attorney’s Office for the Southern District of California. The case was investigated by the Special Inspector General for Afghanistan Reconstruction, the Defense Criminal Investigative Service, the U.S. Army Criminal Investigation Division and the FBI.

Army Sergeant Pleads Guilty to Facilitating Theft of Fuel in Afghanistan

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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.

Two U.S. Contractor Employees Sentenced for Kickback Conspiracy and Tax Crimes Related to Iraq Reconstruction Efforts

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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.