Category Archives: Department of Justice- U.S. Attorney’s Office

Defense Contractor Sentenced to 5 Years in Federal Prison for $53 Million Procurement Fraud and Illegal Gratuities Scheme

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Department of Justice U.S. Attorney’s Office

District of Maryland

FOR IMMEDIATE RELEASE

2015-05-29 11.34.57

Friday, April 28, 2017

Defense Contractor Sentenced to 5 Years in Federal Prison for $53 Million Procurement Fraud and Illegal Gratuities Scheme

Baltimore, Maryland – On April 27, 2017, U.S. District Judge Marvin J. Garbis sentenced John Wilkerson, age 51, of Moultrie, Georgia to five years in prison, followed by three years of supervised release, for a wire fraud conspiracy and for paying illegal gratuities to a government official, in connection with the award of more than $53 million in federal government contracts. Judge Garbis also ordered Wilkerson to pay forfeiture and restitution in the amount of $9,441,340.11.

 

The sentence was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Commander of the Air Force Office of Special Investigations (OSI); Special Agent in Charge Robert Craig, Defense Criminal Investigative Service (DCIS), Mid-Atlantic Field Office; and U.S. Small Business Administration Acting Inspector General Mike Ware.

 

According to his plea agreement, Wilkerson was a Department of Defense Account Manager for Iron Bow Technologies, LLC (Iron Bow), which provided IT consulting and other services to government and industry customers. Wilkerson was also part owner and operated an information technology company, Superior Communications Solutions, Inc. (SCSI).

 

Andrew Bennett, who was separately charged and has pled guilty, was a program manager for an information technology company, Advanced C4 Solutions, or AC4S, from 2005 until 2011. In 2011, Bennett left AC4S and went to work for Wilkerson at SCSI.

 

James T. Shank, who was separately charged and has pled guilty, was a Program Manager at the United States Navy’s Space and Naval Warfare (SPAWAR) Systems Center

 

From September 2009 through August 2012 Wilkerson, Bennett and Shank conspired to steer government contracts at Joint Base Andrews to companies affiliated with Wilkerson and Bennett. After the award of the contracts, Wilkerson offered, and Shank accepted, employment with SCSI while Shank was still a government employee and while he was taking official actions that benefited Wilkerson. In addition, Wilkerson paid Shank $86,000 in the year after Shank retired from government service, funneling the payment through two other companies in order to conceal the source of the funds. Wilkerson also hired Bennett and paid him a $500,000 bonus using proceeds from the fraud scheme.

 

For example, Shank, Wilkerson, and Bennett developed a request for proposal (RFP) for DO27, a contract to supply labor services for an Air Force technology project, including for overall project management services, so that AC4S would win the contract. On June 10, 2010, DO27 was awarded to AC4S in the amount of $18,332,738.10. Wilkerson provided Bennett with a quote for labor on behalf of SCSI that was less than the quote he had previously submitted on behalf of Iron Bow as their sales representative. After SCSI was selected as a subcontractor on DO27, it subcontracted with Iron Bow to provide most of the labor SCSI was supposed to provide under DO27. Wilkerson was able to earn income from the work Iron Bow employees were doing by having SCSI act as a middleman and charging a mark-up on Iron Bow’s work. Wilkerson and Bennett also directed an SCSI employee to create false invoices supposedly documenting the hours SCSI employees spent working on DO27, which were submitted to AC4S and paid by the United States government. SCSI received $6,794,432.98 on DO27 out of the $18 million AC4S received for providing labor for the project.

 

Shank also initiated the procurement process on more than 11 delivery orders that purchased telecommunications equipment and furniture as part of the Air Force project. Those delivery orders were issued to Iron Bow in 2010 and 2011. Wilkerson took multiple items of commercially available furniture, bundled them together and assigned them an SCSI specific number and a price that included a significant mark up over what SCSI paid the furniture manufacturer for the items. Shank then submitted to SPAWAR contracting officers a purchase order asking for authority to buy the bundle of furniture that bore the SCSI specific part number. SCSI received approximately $33 million of the $35 million paid to Iron Bow under the various furniture and equipment delivery orders. Wilkerson charged the United States a 25 percent markup on furniture purchased under these two purchase orders, resulting in a profit to him of more than $6 million.

 

In addition, from 2010 until his retirement in June 2011, Shank falsely certified that the United States government received more than $1 million worth of goods under the W91QUZ-07-D-0010 contract that the government did not in fact receive.

 

In late 2010 or early 2011, Wilkerson offered Shank employment. Shank did not disclose that fact to anyone at SPAWAR and did not recuse himself from any of the contracts that benefited Wilkerson. In February 2011, Bennett left AC4S and went to work for Wilkerson at SCSI. Bennett received a $500,000 bonus when he joined SCSI, which was paid for by profit Wilkerson had earned on the furniture contracts.

 

Shank accepted employment with SCSI in May 2011, but was still working for SPAWAR when he approved more than $1.1 million worth of invoices that benefitted SCSI and Wilkerson.

 

Between July 2011 until August 2012, Wilkerson paid Shank approximately $86,000. The funds that Wilkerson paid Shank were funneled through T&M Communications, LLC, a company owned by T.R., a senior executive at SCSI, who ultimately paid out the funds to Shank. Further, in some instances funds paid to Shank were also funneled through Decision Point Technologies, LLC, another company owned by Wilkerson. Shank did no work for Decision Point Technologies or T&M Communications in that time period.

 

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

 

Acting United States Attorney Stephen M. Schenning thanked Air Force OSI, DCIS, and the U.S. Small Business Administration Office of Inspector General for their work in the investigation. Mr. Schenning commended Assistant U.S. Attorneys Leo J. Wise and Philip A. Selden, who are prosecuting the case.

Former Hedge Fund Manager Pleads Guilty to $9 Million Investment Fraud

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Department of Justice U.S. Attorney’s Office

Eastern District of Virginia

FOR IMMEDIATE RELEASE

Friday, May 12, 2017

ALEXANDRIA, Va. – A Leesburg man pleaded guilty today to wire fraud in connection with his misuse of clients funds, some of which were invested through a purported hedge fund called Crescent Ridge Capital Partners.

According to the statement of facts filed with the plea agreement, Tamer Moumen, 39, defrauded over 50 clients between 2012 and 2017. Moumen falsely told investors that he was a successful trader who consistently beat the S&P500 and was overseeing tens of millions of dollars through his company, Crescent Ridge Capital Partners. Moumen encouraged dozens of clients, including many who were nearing retirement age, to liquidate their other investments and retirement accounts, and invest with him. Moumen did not tell investors that he actually had no experience managing a hedge fund, had a history of losing money in the securities market, and was relying on investor money to support his lifestyle and pay personal expenses. For example, Moumen used investor money to help finance the purchase of a $1 million personal residence in Leesburg, Virginia, a new Tesla, and to repay old investors. In nearly all instances, Moumen lost or spent his clients’ money within a matter of weeks or months of their original investment, but would conceal those facts by providing statements that showed the investment as steadily growing.

According to the statement of facts filed with the plea agreement, beginning in 2015, Moumen was involved with two fundraising efforts that solicited donations to benefit refugees, including a GoFundMe campaign and the Northern Virginia Refugee Fund. Moumen had sole control of the donated funds, some of which he transferred into accounts in his name, where the money was commingled with investor funds. Moumen used money in these accounts to pay personal expenses.

Moumen faces a maximum penalty of 20 years in prison when sentenced on July 28. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Andrew W. Vale, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after U.S. District Judge Anthony J. Trenga accepted the plea. Assistant U.S. Attorney Katherine L. Wong is prosecuting the case.

Former Minister Of Mines For The Republic Of Guinea Convicted Of Receiving And Laundering $8.5 Million In Bribes From Chinese Companies

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Department of Justice U.S. Attorney’s Office

Southern District of New York

FOR IMMEDIATE RELEASE

Thursday, May 4, 2017

Former Minister Of Mines For The Republic Of Guinea Convicted Of Receiving And Laundering $8.5 Million In Bribes From Chinese Companies
Joon H. Kim, the Acting United States Attorney for the Southern District of New York, and Kenneth A. Blanco, the Acting Assistant Attorney General of the Department of Justice’s Criminal Division, announced that MAHMOUD THIAM was convicted in Manhattan federal court yesterday of money laundering charges stemming from his scheme to launder $8.5 million in bribes that THIAM received from senior representatives of a Chinese conglomerate. THIAM was charged with using his official position as Minister of Mines for the Republic of Guinea to facilitate the award to the Chinese conglomerate of exclusive and highly valuable investment rights in various sectors of the Guinean economy. THIAM was convicted after a seven-day trial before U.S. District Judge Denise L. Cote.

 

Acting Manhattan U.S. Attorney Joon H. Kim said: “As a New York federal jury has now found, Thiam abused his official government position to enrich himself at the expense of one of Africa’s poorest countries. Thiam laundered the proceeds of his bribery scheme into the United States to fund his lavish lifestyle, buying a multi-million dollar estate in Dutchess County, and paying for private schools for his children. Thanks to the work of the FBI, Thiam’s scheme was exposed and he was swiftly convicted.”

 

Acting Assistant Attorney General Kenneth A. Blanco said: “As a high-level Minister in Guinea, Thiam sold out his country and then used U.S. banks and real estate to hide millions in bribes paid to him by a Chinese conglomerate. Corruption is a global disease that undermines the rule of law everywhere. The Justice Department is committed to investigating and prosecuting those who commit these crimes and use the U.S. financial system and free marketplace to conceal and benefit from their crimes.”

 

According to the Indictment, other filings in Manhattan federal court, and the evidence admitted at trial:

 

THIAM, a United States citizen who was Minister of Mines and Geology of the Republic of Guinea in 2009 and 2010, engaged in a scheme to accept bribes from senior representatives of a Chinese conglomerate and to launder that money into the United States and elsewhere. In exchange for these multimillion-dollar bribe payments, THIAM used his position as Minister of Mines to facilitate the award to the Chinese conglomerate of exclusive and highly valuable investment rights in a wide range of sectors of the Guinean economy, including near-total control of Guinea’s significant mining sector.

 

In order to receive the bribes covertly, THIAM opened a bank account in Hong Kong (the “Hong Kong Account”) and misreported his occupation to the Hong Kong bank to conceal his status as a public official in Guinea. Upon receiving the bribes, THIAM transferred millions of dollars in bribe proceeds from the Hong Kong Account to, among others, THIAM’s bank accounts in the United States; a Malaysian company that facilitated and concealed THIAM’s purchase of a $3,750,000 estate in Dutchess County, New York; private preparatory schools in Manhattan attended by THIAM’s children; and at least one other West African public official.

 

To further conceal the unlawful source of the bribery proceeds that THIAM transferred from the Hong Kong Account to banks in the United States, THIAM lied to two banks based in Manhattan and on tax returns filed with the Internal Revenue Service regarding the bribe payments, his position as a foreign public official, and the source of the funds in the Hong Kong Account. In total, THIAM received approximately $8.5 million in bribes from the Chinese conglomerate.

 

* * *

 

THIAM, 50, of Manhattan, was convicted of one count of transacting in criminally derived property, which carries a maximum sentence of 10 years in prison, and one count of money laundering, which carries a maximum sentence of 20 years in prison. THIAM is scheduled to be sentenced before Judge Cote on August 11, 2017, at 10:00 a.m.

 

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

 

Mr. Kim praised the outstanding investigative work of the Federal Bureau of Investigation. The Criminal Division’s Office of International Affairs also provided substantial assistance in this matter. The Office is grateful to the government of Guinea for providing substantial assistance in gathering evidence during this investigation.

 

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorneys Elisha J. Kobre and Christopher J. Dimase and Trial Attorney Lorinda I. Laryea of the Fraud Section of the Justice Department’s Criminal Division are in charge of the prosecution.

Former Rutherford County Sheriff Sentenced On Federal Corruption Charges

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Department of Justice U.S. Attorney’s Office

Middle District of Tennessee

FOR IMMEDIATE RELEASE

Thursday, May 4, 2017

Former Rutherford County Sheriff Sentenced On Federal Corruption Charges
Former Rutherford County Sheriff Robert Arnold, 41, of Murfreesboro, Tenn., was sentenced today to 50 months in prison, followed by 3 years of supervised release, after pleading guilty earlier this year to fraud and corruption charges, announced Acting U.S. Attorney Jack Smith of the Middle District of Tennessee and Acting Assistant Attorney General Kenneth A. Blanco of the Justice Department’s Criminal Division.

 

Arnold was indicted in May 2016 and in January 2017, he pleaded guilty to wire fraud, honest services fraud and extortion under color of official right. These charges resulted from an investigation into his role in the formation and operation of the electronic cigarette company, JailCigs, LLC. In his plea, Arnold admitted to using his official position as Sheriff of Rutherford County to benefit JailCigs by allowing the company’s electronic cigarettes to come into the Rutherford County jail as non-contraband and be distributed by county employees; taking steps to disguise his involvement in the company; and misrepresenting the benefits that Rutherford County was supposedly receiving from JailCigs. Additionally, Arnold admitted that he personally received over $66,000 from the company, and that he lied about his income from, and knowledge of, JailCigs when he was confronted by local media in April 2015.

 

In addition to his prison sentence, Senior U.S. District Judge Marvin E. Aspen of the Northern District of Illinois (sitting by designation in the Middle District of Tennessee) ordered Arnold to pay $52,500 in restitution to Rutherford County and to forfeit $66,790, an amount equal to the commission payments he received from sales at the Rutherford County jail, plus the additional payments Arnold obtained that should have been paid to the county general fund. Judge Aspen also ordered Arnold to serve a three-year term of supervised release following his prison sentence.

 

Co-defendants, former Chief Administrative Deputy Joe L. Russell II, of Rutherford County, Tennessee, and John Vanderveer, of Marietta, Georgia, pleaded guilty on Jan. 20 and Jan. 30, respectively. Vanderveer is set to be sentenced on September 6, 2017 and Russell is set to be sentenced on September 8, 2017.

 

 

This case was prosecuted by Assistant U.S. Attorney Cecil W. VanDevender, of the Middle District of Tennessee and Trial Attorney Mark J. Cipolletti of the Criminal Division’s Public Integrity Section. The case was investigated by special agents from the FBI and Tennessee Bureau of Investigation.