Bribery and Bid-Rigging

May 6, 2016

New York announced the sentencing of the remaining three defendants in an elaborate bid-rigging conspiracy that illegally steered multi-million dollar public works contracts for Monroe County to favored and connected companies, resulting in the restraint of competition. The four defendants were originally indicted in November 2013 and charged with a scheme to rig the bidding processes for a number of multi-million dollar public works contracts in Monroe County. Those contracts included a $99 million contract to provide upgrades and maintenance for the County’s IT infrastructure (the “IT project”), and a $212 million contract to provide upgrades and maintenance for the County’s public safety and security systems (the “Public Safety project”). NY

March 29, 2016

Former Navy noncommissioned officer Donald P. Bunch was sentenced to 24 months in prison for accepting cash bribes from vendors while he served in Afghanistan.  According to the plea agreement, Bunch worked as a U.S. Navy E8 senior chief at the Humanitarian Assistance Yard at Bagram Airfield in Afghanistan.  The HA Yard purchased supplies from local Afghan vendors for use as part of the Commander’s Emergency Response Program, which enabled U.S. military commanders to respond to urgent humanitarian relief requirements in Afghanistan.  Bunch admitted accepting roughly $25,000 in bribes from the vendors for securing for them more frequent and lucrative contracts.  Bunch sent greeting cards stuffed with proceeds of the bribes to his wife and used the money to pay for the construction of a new home.  DOJ

March 25, 2016

U.S. Navy Capt. Daniel Dusek was sentenced to 46 months in prison for giving classified information to a foreign defense contractor in exchange for prostitutes, luxury travel and other gifts.  He is the highest-ranking official charged in a massive Navy bribery scandal.  Dusek admitted he used his influence as Deputy Director of Operations for the Seventh Fleet, headquartered in Yokosuka, Japan, and later as executive officer of the USS Essex and the commanding officer of the USS Bonhomme Richard, to benefit Leonard Glenn Francis and his company, Glenn Defense Marine Asia.  DOJ

March 16, 2016

John Bennett, the former founder and CEO of Canada-based Bennett Environmental Inc. was convicted of conspiring to pay kickbacks to guarantee the award of soil treatment contracts to his company for work at Federal Creosote, a Superfund site located in Manville, New Jersey.  Specifically, in exchange for gifts and cash payments, the project manager at Federal Creosote provided Bennett with “last looks” at confidential competitor bids, allowing Bennett to outbid its competitors without independently determining its price, thereby guaranteeing an award to the company and undermining the competitive bid process on this federally-funded project.  DOJ

February 2, 2016

New Jersey industrial pipe supply company American Pipe Bending and Fabrication Co. Inc. and its owner Andrew Martingano were sentenced to 32 months in prison and to pay a $150,000 criminal fine and $1.6 million in restitution for conspiring to commit fraud and pay bribes to a purchasing manager at Consolidated Edison of New York in return for the manager’s efforts to steer contracts to the company.  According to court documents, Martingano and others agreed to pay approximately $510,000 in cash bribes to James M. Woodason, a department manager of the Con Ed purchasing department.  In exchange, Woodason steered Con Ed industrial pipe supply contracts to American Pipe by secretly providing Martingano with confidential competitor bid information, thereby causing Con Ed to pay higher, non-competitive prices for materials.  DOJ

January 29, 2016

U.S. Navy Lieutenant Commander Todd Dale Malaki was sentenced to 40 months in prison and pay a $15,000 fine and $15,000 in restitution for accepting bribes from foreign defense contractor Glenn Defense Marine Asia (GDMA) in exchange for classified U.S. Navy ship and submarine schedules and other internal Navy information.  While he was working as a supply officer for the U.S. Navy’s Seventh Fleet, Malaki began a corrupt relationship with Leonard Glenn Francis, the former president and CEO of GDMA, a company that provided port services to U.S. Navy ships and submarines throughout the Pacific.  As part of the scheme, Malaki provided Francis with classified U.S. Navy ship schedules and proprietary invoicing information about GDMA’s competitors in exchange for luxury hotel stays in Singapore, Hong Kong and the island of Tonga, as well as envelopes of cash, entertainment expenses and the services of a prostitute.  To date, 10 individuals have been charged in connection with this scheme.  DOJ  Just a day earlier, U.S. Navy Commander Michael Vannak Khem Misiewicz pleaded guilty to participating in the same scheme.  DOJ

January 14, 2016

State Street Bank and Trust Company will pay $12 million to settle charges that it conducted a pay-to-play scheme to win contracts to service Ohio pension funds.  An SEC investigation found that Vincent DeBaggis, head of State Street’s public funds group, made a deal with Ohio’s then-deputy treasurer under which DeBaggis would make illicit cash payments and political campaign contributions in exchange for three lucrative contracts to safeguard certain funds’ investment assets and effect the settlement of their securities transactions.  DeBaggis will pay almost $275,000 to settle the SEC’s charges.  In related proceedings, attorney Robert Crowe, who worked as a lobbyist and fundraiser for State Street, was charged in federal court for his role in the scheme.  SEC

December 8, 2015

Three former civilian employees at the Marine Corps Logistics Base (MCLB) and one former employee of Georgia-based trucking company United Logistics were sentenced to prison following their guilty pleas to bribery and conspiracy offenses arising from their handling of military trucking contracts and theft of surplus military equipment.  Mitchell Potts, the former head of the Defense Logistics Agency (DLA) Transportation Office at the MCLB was sentenced to 10 years; Jeffrey Philpot, the former lead transportation assistant under Potts in the DLA Transportation Office, was sentenced to seven years; Shelby Janes, the former inventory control manager of the Distribution Management Center’s Fleet Support Division (FSD) at the MCLB, was sentenced to two years; and Kelli Durham, the former manager of United Logistics, was sentenced to six months.  In addition, they collectively were ordered to pay more than $2 million in forfeiture and restitution.  According to court documents, between 2008 and 2012, Potts and Philpot accepted hundreds of thousands of dollars in bribes from Christopher Whitman, United Logistics co-owner, to assure the company was awarded commercial trucking contracts from the base.  DOJ

October 15, 2015

Houston-based military contractor Kellogg Brown & Root, Inc. (KBR) was ordered to pay roughly $108,000 for violating the Anti-Kickback Act by accepting gifts and gratuities, including expensive dinners, golf outings and event tickets, from various sub-contractors while KBR was providing logistic services to the United States Army Operations Support Command contract known as LOGCAP III.  LOGCAP III was awarded to KBR for the provision of logistical support to the Army in Iraq and Afghanistan.  FBI

September 29, 2015

One current and three former US Army soldiers were sentenced for their involvement in a bribery scheme in Afghanistan that resulted in the theft of fuel valued at more than $10 million.  Jeffery B. Edmondson was the senior enlisted member of the unit who supervised all his co-conspirators and was sentenced to eight years in prison.  Christopher Ciampa was sentenced to 10 years in prison.  Enmanual Lugo was sentenced to four years in prison.  And Geoffrey Montague was a senior enlisted member of the unit who reported to Edmondson and was sentenced to five years in prison.  In connection with their guilty pleas, the defendants admitted to submitting fake Transportation Movement Requests (TMRs) for thousands of gallons of fuel that were neither necessary nor used by military units.  The defendants admitted that, in return for cash bribe payments, they awarded all the TMRs to the same Afghan trucking company, which used the fake TMRs to download fuel from depots on Kandahar Air Field and then sold the fuel on the black market.  DOJ