Tag Archives: Overseas Contingency Operations

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.

U.S. Army Major Pleads Guilty in South Carolina to Defrauding U.S. Government

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WASHINGTON – A U.S. Army Major has pleaded guilty today to accepting thousands of dollars in gratuities from contractors while he was a U.S. Army captain deployed to Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the District of South Carolina William N. Nettles.

Ulysses S. Hicks, 40, of Sumter, S.C., pleaded guilty before U.S. District Chief Judge Margaret B. Seymour in the District of South Carolina to a criminal information charging him with one count of conspiracy to accept illegal gratuities.

According to court documents, Hicks was a captain in the U.S. Army, who was deployed to Forward Operating Base (FOB) Hammer in Iraq as a pay agent for field ordering officer (FOO) funds.  FOO funds are used to purchase miscellaneous items and supplies such as paint, lumber and plywood from local vendors.  It is a violation of federal law for pay agents to accept gratuities from contractors dependent upon them for contracts.

From about March 2007 through October 2008, Hicks, along with co-conspirator former U.S. Army Master Sergeant Julio Soto Jr., was involved with the construction of a government building at FOB Hammer by local Iraqi contractors.  According to court documents, Hicks and Soto unlawfully sought, received and accepted illegal gratuities for helping Iraqi contractors gain U.S. government contracts.  After accepting the illegal gratuities, Hicks and Soto purchased U.S. Postal money orders with the illegal proceeds and mailed them back to the United States.

At sentencing, Hicks faces a maximum penalty of five years in prison, a fine of $250,000 and up to three years of supervised release.  As part of his plea agreement, Hicks agreed to pay $65,409 plus interest in restitution to the United States.

Soto pleaded guilty on Aug. 29, 2012, before U.S. District Chief Judge Seymour to a criminal information charging him with one count of conspiracy to accept illegal gratuities.  On Dec. 7, 2012, Soto was sentenced to serve five years of probation and ordered to pay $62,542 in restitution.

This case is being prosecuted by Special Trial Attorney Mark Grider of the Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney Winston Holliday, Deputy Chief of the General Crimes Section of the U.S. Attorney’s Office for the District of South Carolina.  The case was investigated by SIGIR, the Defense Criminal Investigative Service and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.

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.

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.

California Man Sentenced to 15 Months in Prison For Conspiracy to Defraud USAID of $386,279 – Admitted Scheme to Embezzle Agency Funds Meant for Global Health

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PRESS RELEASE
FOR IMMEDIATE RELEASE For Information Contact:
Tuesday, November 6, 2012 Public Affairs
(202) 252-6933

WASHINGTON – Everett Lipscomb Jr., 42, of Aliso Viejo, Calif., has been sentenced
to 15 months in prison on a charge stemming from his role in a conspiracy to embezzle more than $386,000 from a federal program meant to address global health problems.
The sentence was announced by Ronald C. Machen Jr., U.S. Attorney for the District of
Columbia, and Michael G. Carroll, Deputy Inspector General for the U.S. Agency for
International Development (USAID).
Lipscomb pled guilty in March 2012 to one count of conspiracy to commit wire and mail
fraud, a federal felony. He was sentenced on Nov. 5, 2012 by the Honorable Beryl A. Howell in the U.S. District Court for the District of Columbia. As part of his sentence, Lipscomb was ordered to pay full restitution of $386,279 to USAID. Lipscomb also consented to an order forfeiting any property he owned up to that amount. As indicated in court filings, the government has already seized about $49,000 in proceeds from the scheme from other coconspirators. Upon completion of his prison term, Lipscomb will be placed on two years of supervised release.
As part of his plea, Lipscomb admitted that he conspired together with Mark Adams, a
former deputy director at a private contractor that did business with USAID, and Adams’s wife, Latasha Bell. Lipscomb admitted that Adams used his position at the contracting company to submit and approve false and fraudulent invoices and thereby obtain money.
In Lipscomb’s case, the bogus invoices claimed amounts due for services from Octopus
Limited Audio and Visual, a company controlled by Lipscomb. However, neither Lipscomb nor Octopus – or anyone else – performed the work and services claimed on the invoices. Lipscomb admitted that between April 2008 and August 2010, he received payments from the USAID contracting company totaling $386,279. Of that amount, Lipscomb kept $157,372 for himself and passed the remainder, $228,907, back to Adams and Bell.
Lipscomb further admitted that the fraudulent bills were paid with money that should
have been used for USAID’s global health program. The program addresses major global issues, including HIV/AIDS. At sentencing, Judge Howell noted that the company that employed Adams was seriously impacted by the crime. The company lost its contract with USAID and several employees lost their jobs as a result.
Adams, 44, and Bell, 36, of Fort Washington, Md., pled guilty last month to their roles in
the conspiracy. Adams admitted that the scheme involved more than $1.084 million in
fraudulent payments through such fake invoices between 2006 and 2010. Adams and Bell used the payments to complete an extensive renovation of their home and to buy luxury automobiles.
Adams and Bell are scheduled to be sentenced on Dec. 14, 2012, also before Judge
Howell. Under federal sentencing guidelines, Adams faces a sentence of up to 51 to 63 months of incarceration. Under the plea agreement, Bell agreed to a sentence of home confinement.
In announcing the sentence, U.S. Attorney Machen and Deputy Inspector General Carroll
commended the work of the special agents from the USAID Office of Inspector General, which investigated the case. They also thanked those who worked on the case from the U.S. Attorney’s Office, including Paralegal Specialists Krishawn Graham and Nicole Wattelet, Forensic Accountant Crystal Boodoo, Assistant U.S. Attorney Anthony Saler, who handled forfeiture issues, and Assistant U.S. Attorney Jonathan Hooks, who is prosecuting the case.

IG report: Iraqi auditors point to huge money laundering ($800 million per week)

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10/30/2012  IG report: Iraqi auditors point to huge money laundering Stars and Stripes

“Iraqi auditors believe as much as $800 million in U.S. dollars is being sent out of the country illegally each week, draining it of hard currency, according to a report by American inspectors released Tuesday.

The findings point to widespread money laundering and could focus further attention on oversight at Iraq’s central bank, which is at the heart of a probe into alleged financial wrongdoing involving its former governor and other top officials.

The U.S. Special Inspector General for Iraq Reconstruction said in a report that auditors in Baghdad fear up to 80 percent of an estimated $1 billion leaving the country weekly lacks proper documentation.

Former Employee of Army Contractor Pleads Guilty to Bribery

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FOR IMMEDIATE RELEASE
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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FOR IMMEDIATE RELEASE
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.

U.S. Army Master Sergeant Pleads Guilty to Defrauding U.S. Government

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FOR IMMEDIATE RELEASE
Wednesday, August 29, 2012
U.S. Army Master Sergeant Pleads Guilty to Defrauding U.S. Government

WASHINGTON – A U.S. Army master sergeant pleaded guilty today to accepting thousands of dollars in gratuities from contractors during his deployment to Iraq as a field ordering officer at a forward operating base in Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney for the District of South Carolina William N. Nettles.

Julio Soto Jr., 52, of Columbus, Ga., pleaded guilty today before U.S. District Chief Judge Margaret B. Seymour in the District of South Carolina to a criminal information charging him with one count of conspiracy to accept illegal gratuities.

According to court documents, Soto was a master sergeant in the U.S. Army, deployed to Forward Operating Base (FOB) Hammer in Iraq, as a field ordering officer (FOO), a public official.  FOO funds are used to purchase miscellaneous items and supplies such as paint, lumber and plywood from local vendors.  It is a violation of federal law for field ordering officers to accept gratuities from contractors dependent upon them for contracts.

In or about March 2007 through October 2008, Soto, along with an alleged U.S. Army co-conspirator, was involved with the construction of a government building at FOB Hammer by local Iraqi contractors.  Soto and his alleged co-conspirator unlawfully sought, received and accepted illegal gratuities for helping Iraqi contractors gain U.S. government contracts, and then purchased U.S. Postal money orders with the illegal proceeds and mailed them back to the United States.

At sentencing, Soto faces a maximum penalty of five years in prison, a fine of $250,000, or twice the pecuniary gain or loss, and up to three years of supervised release.  As part of his plea agreement, Soto agreed to pay $62,542 plus interest in restitution to the United States.

This case is being prosecuted by Special Trial Attorney Mark Grider of the Justice Department Criminal Division’s Fraud Section, on detail from the Special Inspector General for Iraq Reconstruction (SIGIR), and by Assistant U.S. Attorney Dean A. Eichelberger of the District of South Carolina.  The case is being investigated by SIGIR, the Defense Criminal Investigative Service and the Major Procurement Fraud Unit of the U.S. Army Criminal Investigation Command.