Tag Archives: Leslie R. Caldwell

Army National Guard Soldier Pleads Guilty in Connection with Bribery and Fraud Scheme

Posted on by

To Date, 24 Individuals Have Pleaded Guilty in Ongoing Corruption Investigation.

A soldier of the U.S. Army National Guard pleaded guilty today for his role in a wide-ranging corruption scheme involving fraudulent recruiting bonuses from the Army National Guard Bureau.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and U.S. Attorney Robert Pitman for the Western District of Texas made the announcement.
Sergeant First Class Eduardo Ruesga-Larracilla, 41, of San Antonio, Texas, pleaded guilty today to one count of conspiracy to commit bribery and wire fraud, and one count of bribery of a public official.
The case against Ruesga arises from an investigation that has led to charges against 26 individuals, 24 of whom have pleaded guilty.
According to court documents, 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 National Guard.    Through this program, a participating soldier could receive up to $2,000 in bonus payments for a referral.    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.
Ruesga admitted that between approximately January 2010 and approximately October 2011, he conspired with a recruiter and paid him for the personal information of potential Army National Guard soldiers.    Ruesga further admitted that, in order to obtain fraudulent bonuses, he used the personal information for these potential soldiers fraudulently to claim that he was responsible for referring these soldiers for enlistment in the National Guard.
Ruesga is scheduled to be sentenced on Oct. 9, 2014 before U.S. District Judge Orlando L. Garcia in San Antonio, Texas.
This case is being investigated by the San Antonio Fraud Resident Agency of the 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.

Former Chesapeake, Virginia Subcontractor Sentenced for Conspiracy to Commit Bribery

Posted on by

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.

Owner of Home Health Company Pleads Guilty to Role in $6.5 Million Health Care Fraud Scheme

Posted on by

The owner and operator of Nestor’s Health Services, Inc. (Nestor HH), a now-defunct Miami home health care agency, pleaded guilty today in connection with a $6.5 million health care fraud scheme.

Acting Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Acting Special Agent in Charge Brian Martens of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.

Cruz Sonia Collado, 64, of Homestead, Florida, pleaded guiltybefore U.S. District Judge Robert N. Scola in the Southern District of Florida to one count of conspiracy to offer and pay health care kickbacks and to defraud the United States, and to one count of offering and paying health care kickbacks.

Collado was an owner and operator of Nestor HH, a Miami home health care agency that purported to provide home health and physical therapy services to Medicare beneficiaries.

According to court documents, Collado and her co-conspirators operated Nestor HH for the purpose of billing Medicare for, among other things, expensive physical therapy and home health care services that were not medically necessary and/or were not provided.   As the owner and operator of Nestor HH, Collado paid kickbacks and bribes to patient recruiters, in return for those recruiters providing patients to Nestor HH for home health care and therapy services that were not medically necessary, and in many instances, were not provided.  Collado would then fraudulently bill the Medicare program for home health care services on behalf of these recruited patients, which Collado knew was in violation of federal criminal laws.

From approximately March 2009 through at least January 2014, Nestor HH submitted more than $6.5 million in claims for home health services, and fraudulently obtained more than $6.1 million before the fraud was exposed.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.    This case is being prosecuted by Trial Attorneys Anne P. McNamara and A. Brendan Stewart of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion.    In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.

Former Owner of Physical Therapy Clinic Sentenced to Prison in Connection with Health Care Fraud Scheme

Posted on by

A Florida man who was convicted of conspiracy to commit health care fraud was sentenced to serve 27 months in prison today in federal court in Tampa, Florida.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney for the Middle District of Florida A. Lee Bentley III, Acting Special Agent in Charge Ryan Lynch of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Florida region, and Special Agent in Charge Paul Wysopal of the FBI’s Tampa Field Office made the announcement.
Jose Pascual, 36, previously pleaded guilty to an information charging him with conspiracy to commit health care fraud.     In addition to his prison term, he was sentenced to serve three years of supervised release and ordered to pay $1,292,375 in restitution, jointly and severally with his co-conspirators.
According to documents filed in the case, in February 2007, Pascual purchased R&R Outpatient LLC, an outpatient physical therapy provider with locations in Fort Myers and Ocala, Florida.    Pascual and his co-conspirators then caused reimbursement claims to be submitted on behalf of R&R Outpatient to Medicare fraudulently representing that physical and occupational therapy services had been legitimately prescribed by physicians and provided to Medicare beneficiaries.    Pascual and his co-conspirators fabricated medical records to support the fraudulent claims.    As a result of the fraudulent claims, Medicare paid approximately $1,124,826 to R&R Outpatient.    Pascual and his co-conspirators also recycled Medicare beneficiary information from R&R Outpatient in order to submit fraudulent reimbursement claims to Medicare through other clinics.
This case was investigated by HHS-OIG and the FBI and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Florida.    The case was prosecuted by Trial Attorney Christopher J. Hunter of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Simon Gaugush.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion.    In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Office Worker Pleads Guilty in Miami for Role in $7 Million Health Care Fraud Scheme

Posted on by

An office worker pleaded guilty today in connection with a health care fraud scheme involving Anna Nursing Services Corp. (Anna Nursing), a defunct home health care company.
Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Wifredo A. Ferrer of the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Acting Special Agent in Charge Brian Martens of the Department of Health and Human Services Office of Inspector General (HHS-OIG), Office of Investigations Miami office made the announcement.
Lizette Garcia, 37, of Miami, Florida, pleaded guilty before U.S. District Judge Joan A. Lenard in the Southern District of Florida to one count of payment of health care kickbacks.    Sentencing is scheduled for Aug. 27, 2014.
Garcia was an office worker at Anna Nursing, a Miami home health care agency that purported to provide home health and therapy services to Medicare beneficiaries.    According to court documents, Anna Nursing was operated for the purpose of billing the Medicare Program for, among other things, expensive physical therapy and home health care services that were medically unnecessary and/or were not provided.
On behalf of the owners and operators of Anna Nursing, Garcia paid kickbacks and bribes to patient recruiters in return for the recruiters providing patients to Anna Nursing for home health care and therapy services that were medically unnecessary and/or were not provided.    Anna Nursing then billed the Medicare program on behalf of the recruited patients, which Garcia knew was in violation of federal criminal laws.
From approximately October 2010 through approximately April 2013, Anna Nursing was paid by Medicare approximately $7 million for fraudulent claims for home health care services that were medically unnecessary and/or were not provided.
The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida.    This case is being prosecuted by Trial Attorneys A. Brendan Stewart and Anne McNamara of the Criminal Division’s Fraud Section.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,900 defendants who have collectively billed the Medicare program for more than $6 billion.    In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, has removed over 17,000 providers from the Medicare program since 2011.

Former Rabobank Trader Pleads Guilty for Scheme to Manipulate Yen Libor

Posted on by

A former Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A. (Rabobank) Japanese Yen derivatives trader pleaded guilty today for his role in a conspiracy to commit wire and bank fraud by manipulating Rabobank’s Yen London InterBank Offered Rate (LIBOR) submissions to benefit his trading positions.
Attorney General Eric H. Holder, Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Deputy Assistant Attorney General Brent Snyder of the Justice Department’s Antitrust Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement.
Today, a criminal information was filed in the Southern District of New York charging Takayuki Yagami, a Japanese national, with one count of conspiracy to commit wire fraud and bank fraud.   Yagami pleaded guilty to the information before United States District Judge Jed S. Rakoff in the Southern District of New York.
“With this guilty plea, we take another significant step to hold accountable those who fraudulently manipulated the world’s cornerstone benchmark interest rate for financial gain,” said Attorney General Eric Holder.  “This conduct distorted transactions and financial products around the world.  Manipulating LIBOR effectively rigs the global financial system, compromising the fairness of world markets.  This plea demonstrates that the Justice Department will never waver, and we will never rest, in our determination to ensure the integrity of the marketplace and protect it from fraud.
“Today, a former Rabobank trader has pleaded guilty to participating in a scheme to manipulate the global benchmark interest rate LIBOR to benefit Rabobank’s trading positions,” said Assistant Attorney General Caldwell.    “This was the ultimate inside job.    As alleged, traders illegally influenced the very interest rate on which their trades were based, using fraud to gain an unfair advantage.    Takayuki Yagami is the ninth person charged by the Justice Department in connection with the industry-wide LIBOR investigation, and we are determined to pursue other individuals and institutions who engaged in this crime.”
“Today’s guilty plea is a significant step forward in the LIBOR investigation and demonstrates the Department’s firm commitment to individual accountability,” said Deputy Assistant Attorney General Snyder.  “We will continue to pursue aggressively other individuals involved in this or other illegal schemes that undermine free and fair financial markets.”
“Manipulating financial trading markets to create an unfair advantage is against the law,” said Assistant Director in Charge Parlave.  “Today’s guilty plea further underscores the FBI’s ability to investigate complex international financial crimes and bring the perpetrators to justice.  The Washington Field Office has committed significant time and resources including the expertise of Special Agents, forensic accountants and analysts to investigate this case along with our Department of Justice colleagues.  Their efforts send a clear message to anyone contemplating financial crimes: think twice or you will face the consequences.”
According to court documents, LIBOR is an average interest rate, calculated based on submissions from leading banks around the world, reflecting the rates those banks believe they would be charged if borrowing from other banks.    LIBOR serves as the primary benchmark for short-term interest rates globally and is used as a reference rate for many interest rate contracts, mortgages, credit cards, student loans and other consumer lending products.    The Bank of International Settlements estimated that as of the second half of 2009, outstanding interest rate contracts were valued at approximately $450 trillion.
At the time relevant to the charges, LIBOR was published by the British Bankers’ Association (BBA), a trade association based in London.    LIBOR was calculated for 10 currencies at 15 borrowing periods, known as maturities, ranging from overnight to one year.    The published LIBOR “fix” for Yen LIBOR at a specific maturity is the result of a calculation based upon submissions from a panel of 16 banks, including Rabobank.
Yagami admitted to conspiring with Paul Robson, of the United Kingdom, Paul Thompson, of Australia, and Tetsuya Motomura, of Japan.  Robson, Thompson and Motomura were charged with conspiracy to commit wire fraud and bank fraud as well as substantive counts of wire fraud in a fifteen-count indictment returned by a federal grand jury in the Southern District of New York on April 28, 2014.    All four are former employees of Rabobank.
Rabobank entered into a deferred prosecution agreement with the Department of Justice on Oct. 29, 2013 and agreed to pay a $325 million penalty to resolve violations arising from Rabobank’s LIBOR submissions.
According to allegations in the information and indictment, the four defendants traded in derivative products that referenced Yen LIBOR.    Robson worked as a senior trader at Rabobank’s Money Markets and Short Term Forwards desk in London; Thompson was Rabobank’s head of Money Market and Derivatives Trading Northeast Asia and worked in Singapore; Motomura was a senior trader at Rabobank’s Tokyo desk who supervised money market and derivative traders; and Yagami worked as a senior trader at Rabobank’s Money Market/FX Forwards desks in Tokyo and elsewhere in Asia.    In addition to trading derivative products that referenced Yen LIBOR, Robson also served as Rabobank’s primary submitter of Yen LIBOR to the BBA.
Robson, Thompson, Motomura and Yagami each entered into derivatives contracts containing Yen LIBOR as a price component .    The profit and loss that flowed from those contracts was directly affected by the relevant Yen LIBOR on certain dates.    If the relevant Yen LIBOR moved in the direction favorable to the defendants’ positions, Rabobank and the defendants benefitted at the expense of the counterparties.    When LIBOR moved in the opposite direction, the defendants and Rabobank stood to lose money to their counterparties.
As alleged in court filings, from about May 2006 to at least January 2011, the four defendants and others agreed to make false and fraudulent Yen LIBOR submissions for the benefit of their trading positions.    According to the allegations, sometimes Robson submitted rates at a specific level requested by a co-defendant, including Yagami, and consistent with the co-defendant’s trading positions.    Other times, Robson made a higher or lower Yen LIBOR submission consistent with the direction requested by a co-defendant and consistent with the co-defendant’s trading positions.    On those occasions, Robson’s manipulated Yen LIBOR submissions were to the detriment of, among others, Rabobank’s counterparties to derivative contracts.    Thompson, Motomura and Yagami (described in the indictment as Trader-R) made requests of Robson for Yen LIBOR submissions through electronic chats and email exchanges.
For example, according to court filings, on Sept. 21, 2007, Yagami asked Robson by email, “wehre do you think today’s libors are?    If you can I would like 1mth higher today.” Robson responded, “bookies reckon .85,” to which Yagami replied, “I have some fixings in 1mth so would appreciate if you can put it higher mate.” Robson answered, “no prob mate let me know your level.” After Yagami asked for “0.90% for 1mth,” Robson confirmed, “sure no prob[ ] I’ll probably get a few phone calls but no worries mate… there’s bigger crooks in the market than us guys!”
The indictment alleges that Robson accommodated the requests of his co-defendants.    For example, on Sept. 21, 2007, after Robson allegedly received a request from Yagami for a high 1-month Yen LIBOR, Rabobank submitted a 1-month Yen LIBOR rate of 0.90, which was 7 basis points higher than the previous day and 5 basis points above where Robson said that “bookies” predicted it, and which moved Rabobank’s submission from the middle to the highest of the panel.
According to court documents, the defendants were also aware that they were making false or fraudulent Yen LIBOR submissions.    For example, on May 10, 2006, Robson admitted in an email to Yagami that “it must be pretty embarrasing to set such a low libor.  I was very embarrased to set my 6 mth – but wanted to help thomo [Thompson].  Tomorrow it will be more like 33 from me.” At times, Robson referred to the submissions that he submitted on behalf of his co-defendants as “ridiculously high” and “obscenely high,” and acknowledged that his submissions would be so out of line with the other Yen LIBOR panel banks that he might receive a phone call about them from the BBA or Thomson Reuters.
The charges in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
The investigation is being conducted by special agents, forensic accountants, and intelligence analysts in the FBI’s Washington Field Office.    The prosecution is being handled by Senior Litigation Counsel Carol L. Sipperly and Trial Attorney Brian R. Young of the Criminal Division’s Fraud Section, and Trial Attorney Michael T. Koenig of the Antitrust Division.    The Criminal Division’s Office of International Affairs has provided assistance in this matter.
The Justice Department expresses its appreciation for the assistance provided by various enforcement agencies in the United States and abroad.    The Commodity Futures Trading Commission’s Division of Enforcement referred this matter to the department and, along with the U.K. Financial Conduct Authority, has played a major role in the LIBOR investigation.  The Securities and Exchange Commission also has played a significant role in the LIBOR series of investigations, and the department expresses its appreciation to the United Kingdom’s Serious Fraud Office for its assistance and ongoing cooperation.     The department has worked closely with the Dutch Public Prosecution Service and the Dutch Central Bank in the investigation of Rabobank.    Various agencies and enforcement authorities from other nations are also participating in different aspects of the broader investigation relating to LIBOR and other benchmark rates, and the department is grateful for their cooperation and assistance.
This prosecution is part of efforts underway by President Barack Obama’s Financial Fraud Enforcement Task Force.  President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources.  The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets and recover proceeds for victims of financial crimes.  For more information about the task force visit: www.stopfraud.com.

 

Los Angeles Physician Indicted in $33 Million Medicare Fraud Scheme

Posted on by

A Los Angeles physician was indicted today for a $33 million scheme to defraud Medicare, announced Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney André Birotte Jr. of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) for the Los Angeles Region and Assistant Director in Charge Bill L. Lewis of the FBI’s Los Angeles Field Office.

Robert A. Glazer, 67, of Los Angeles, California, was indicted in the Central District of California and charged with one count of conspiracy to commit health care fraud.

According to court documents, Glazer operated a medical clinic located in Los Angeles.    From approximately January 2006 through May 2014, Glazer allegedly billed Medicare for services that were not medically necessary, and at times were not provided to the Medicare beneficiaries.    In addition, Glazer allegedly signed prescriptions, certifications, and other medical documents for medically unnecessary home health services, hospice services, and power wheelchairs and other durable medical equipment (DME).    Glazer’s co-conspirators then sold the prescriptions and certifications to DME supply companies, home health agencies, and other providers, knowing that the prescriptions and certifications were fraudulent.    Based on these fraudulent prescriptions and certifications, the DME supply companies, home health agencies, and other providers then allegedly submitted false and fraudulent claims to Medicare.
As further alleged in court documents, from approximately January 2006 through May 2014, fraudulent prescriptions and certifications from Glazer were responsible for approximately $33,484,779 in false and fraudulent claims to Medicare, and Medicare paid approximately $22,056,332 on those claims.

The case was investigated by the FBI and HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.    This case is being prosecuted by Trial Attorneys Fred Medick and Blanca Quintero of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 1,900 defendants who have collectively billed the Medicare program for more than $6 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov .

Two Individuals Plead Guilty to Conspiring to Launder Bribes Received in Afghanistan

Posted on by

Two individuals have pleaded guilty for their roles in a scheme to launder approximately $250,000 in bribes received from Afghan contractors in Afghanistan.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, United States Attorney for the Western District of Tennessee Edward L. Stanton III and United States Attorney for the Eastern District of Tennessee William C. Killian made the announcement.
Jimmy W. Dennis, 44, formerly of Clarksville, Tennessee, and a former First Sergeant with the U.S. Army, pleaded guilty before U.S. District Court Judge Samuel H. May Jr. of the Western District of Tennessee to conspiracy to launder approximately $250,000 in bribe payments he received from Afghan contractors in Afghanistan.    Sentencing is scheduled for Sept. 4, 2014.

James C. Pittman, 45, of Rossville, Georgia, pleaded guilty last Thursday before U.S. Magistrate Judge William B. Carter of the Eastern District of Tennessee for his role in this conspiracy.    Sentencing is scheduled for Sept. 8, 2014.

According to pleadings filed at the time of the guilty pleas, from March 2008 through March 2009, Dennis was an Army Sergeant assigned as a paying agent in the Humanitarian Aid Yard (HA Yard) at Bagram Air Field, Afghanistan.    Dennis was a member of the team in the HA Yard that purchased supplies from local Afghan vendors for distribution as part of the Commander’s Emergency Response Program for urgent humanitarian relief requirements in Afghanistan.    Dennis and a partner entered into an agreement to steer contracts to certain Afghan vendors in return for approximately $250,000 in cash bribes.

Further according to court pleadings, Dennis smuggled the bribe money back to the United States hidden in packages addressed to his wife, his father and a former Army friend, Pittman.    Dennis sent $80,000 to $100,000 to his father from Afghanistan in packages that contained toy “jingle trucks,” colorfully decorated trucks or buses in Afghanistan and Pakistan.    Dennis hid the money in the rear compartment of the toy trucks.    Dennis also shipped a hope chest to his father containing approximately $100,000 in cash in a concealed compartment.

Also according to court documents, while on leave, Dennis met with Pittman, advised him that he had obtained money through kickbacks, and asked him for help laundering the funds.    Pittman, owner of a landscaping business, agreed to “run through his company” these bribery proceeds.  After returning to Afghanistan, Dennis sent approximately $60,000 to Pittman contained in toy jingle trucks.    Dennis also arranged for his father to send approximately $20,000 to Pittman, who returned it in the form of purported salary checks from Pittman’s company.

These matters are being investigated by the Special Inspector General for Afghanistan Reconstruction, the FBI, the Army Criminal Investigative Division, the Defense Criminal Investigative Service, and the Air Force Office of Special Investigation.    The prosecution is being handled by Trial Attorney Daniel Butler of the Criminal Division and Assistant U.S. Attorneys Frederick Godwin of the Western District of Tennessee and James Brooks of the Eastern District of Tennessee.