Landmark Frauds Reported by Various Sources

For the year 2006 there was a reported $3. 1 billion in settlements and judgments in cases involving fraud against the government and it was the largest amount ever recovered in a single year. Although it is difficult to list all sources of the money, it is possible to show the list of cases some sources considered to be landmark cases of US government procurement/contracting fraud. One sizeable amount $615 million was paid by Boeing Co. for use of confidential competitor information and for taking a former Air Force acquisition chief under its employment, by making him in charge of the contract it made with the government.

In another incident, the deputy inspector for the US Agency for International Development Michael G Carroll office investigation had led to a seven-count indictment of USAID contracting firm and four other individuals for major fraud, conspiracy, and wire fraud on an attempt to defraud the US government in their involvement with the war and reconstruction effort in Afghanistan. The indictment bases its allegation on the finding that the accused have defrauded the US government from June 2003 to July 2007 by obtaining reimbursement for inflated expenses.

The case had been brought to the US Department of Justice in Washington D. C. where if the accused are convicted they could pay up to $250,000 fine and could face a maximum of five years in prison. Another allegation on Iraq War Contract involves overbidding by L-3 Vetrex Aerospace. The company had paid $4 million for the settlement of the allegation. The allegation was the company had inflated the claims it submitted for the number of hours worked by the company’s employees to provide support for the US military operation in Iraq. The service the company was providing was helicopter maintenance service at Camp Taji, Iraq.

It was a staff whistleblower that brought the fraud to the attention of the responsible governmental agency and had received $720,000 as his share of the recovered settlement. A 22-year old defense contractor had pleaded not guilty for the indictment that he had defrauded the US government by delivering faulty and decades old ammunition that originated from China to Afghan security forces. A federal grand jury had indicted Efraim Diveroli owner of AEY Inc on 71 counts for delivering the outdated Chinese ammunition through a $298 million Defense Department contract.

The defendant had claimed the source was the Albanian government that bought it from the Chinese government before there was a ban on Chinese ammunition. Another case considered as a landmark was the indication of an Army chief warrant officer for receiving a $50,000 kickback to steer a paper products and plastic flatware contract away from a government contractor and to a Kuwaiti company. The indictment took place in Rock Island where prosecutors alleged that the officer took the bribe while working at Camp Arifjan located in Kuwait as the Army’s food service adviser in Iraq, Afghanistan, and Kuwait.

There was also another allegation where the officer suffered apprehension while trying to smuggle $40,000 in undeclared cash into the US, on a flight from Kuwait to Dover in December 2005. In another landmark case Trenton, NJ federal jury has indicted three former US Army officers and two US civilians accusing them for their role in a bribery, fraud, and money laundering scheme that resulted in a theft of millions of dollars from the Coalition Provisional Authority (CPA) in Iraq. The case was made public by Deputy Attorney General Paul J.

McNulty. The 25-count indictment charged U. S. Army Colonel Curtis G. Whiteford, Michael B. Wheeler, and U. S. Army Lt. Colonels Debra M. Harrison and two civilians Michael Morris and William Driver with various allegations that have to do with a scheme to defraud the CPA – South Central Region (CPA-SC) in al-Hillah, Iraq. Among them, Whiteford who was once the second-most senior official at CPA-SC received an indictment for conspiracy, bribery, and 11 counts of dishonest services where wire fraud was involved.

Harrison, a one time acting Comptroller of CPA-SC who was in charge of the expenditure of CPA-SC funds for reconstruction projects was charged of conspiracy, bribery, 11 counts of dishonest services wire fraud, four counts of interstate transport of stolen property, one count of bulk cash smuggling, four counts of money laundering, and one count of preparing a false tax form. Wheeler also had received similar indication for similar allegations. There had been an effort by the US attorney Paul J.

McNulty to detect and prevent procurement fraud early, with an increased interacting of national security and various government programs. In light of that the US attorney office had joined hand with federal law enforcement agencies and had formed Procurement Fraud Working Group. Operation III Wind In addition, there was a similar formation in Eastern District of Virginia (EDVA) where there was a similar program called “Operation III Wind” credited for uncovering major procurement fraud scandals and had resulted in around 70 convictions that involved defense contractors, employees, consultants, and government official.

Among the highest rank officials, an Assistant Secretary for the Navy, a Deputy assistant Secretary of the Navy, and a Deputy Assistant Secretary of the Air Force were among the indicted. It is possible to cite few examples for the purpose here. One incident involves Darlene Druyun an executive with DoD who was able to obtain work for her daughter, her daughter’s finance, and herself with Boeing while negotiating on behalf of the Airforce.

The allegation was she gave Boeing a “parting gift” by purchasing a Boeing tanker aircraft with a much higher price that was not appropriate and this scandal had also involved Michael Sears the chief finical officer of Boeing. In another incident Robert Lee Neal, Jr. , and Francis Delano Jones, Jr. , both DoD officials get conviction for bribery, money laundering, and other similar crimes in the year 2003.

Another individual Kevin Hawking had received indictment for accepting more than $47,000 in bribes by promising to make more than $200,000 fictitious purchase using credit cards for the Pentagon. Another individual indicted was Bobby Gilchris accused of receiving over $200,000 in bribes by participating in a credit card scheme that cost the government up to $400,000 loss. There are more cases of this kind where the indicted individuals had faced various penalties.