“Sacred Honor Lost” Recent Cases

Recent cases security officers should know about:

Embezzlement/Theft

• Woman Sentenced for Defrauding Former Employer of More Than $440,000 
  • while working as the bookkeeper and accountant for Telsar Laboratories, Inc. (TLI), she fraudulently caused electronic deposits to be made to her own accounts and also caused fraudulent payments to be made to her by check out of TLI accounts.
• Non-Profit Executives Charged with Stealing Funds Intended to Help the Homeless 
  • using funds intended to help the homeless to pay for their own personal and living expenses
• Employee Sentenced to 46 Months in Prison for Embezzling More Than $5.1 Million from Non-Profit Money Stolen Over Eight-Year Period 
  •  Green created and submitted false invoices to the Association of American Medical Colleges in the name of three entities – The Brookings Institute, FCI, and the University Health System Consortium, also known as UHC. In doing so, she was seeking payment for services that were never provided and without the association’s knowledge that Green would be the actual recipient of the payments.
• Financial Adviser Sentenced to 46 Months in Prison for Stealing from Her Clients 
  • While working as a financial advisor, Kern stole $642,625 from approximately 20 clients by making wire transfers from client accounts to Kern’s own bank accounts and credit cards. Kern also forged client signatures on checks. 
• U.S. House of Representatives Employee Pleads Guilty to Theft of Government Property 
  • Brian Prokes, 28, a former office manager in the U.S. House of Representatives, pleaded guilty today for causing the House of Representatives to pay more than $19,000 in excess salary and unauthorized travel expenses
• Woman Sentenced to 57 Months in Prison for Embezzling More Than $400,000 from Employer  
  • schemed to embezzle from her employer by preparing fraudulent checks and electronic transfers for her own benefit. To cover up the scheme, Griffis made fraudulent entries in her employer’s accounting records to make it appear as if the fraudulent expenses were legitimate when, in fact, they were not. The stolen money was used to finance Griffis’s lavish lifestyle, including paying for numerous vacations, shopping sprees, and other personal expenses. 
• Man Pleads Guilty to Stealing More Than $59,000 from Employer  
  • used his employer’s debit card and personal identification number to make approximately 200 withdrawals totaling $59,602
• Credit Union Employee Sentenced for Embezzlement  
  • embezzled approximately $219,600 from Milledgeville Community Credit Union, where she was the manager and responsible for supervising other employees. Kent was also responsible for her own cash drawer and for handling various transactions on accounts, including the deposit and withdrawal of funds to and from customers’ accounts. As stated in the plea agreement, to conceal her embezzlement, Kent created fictitious loans using the names of family members and fictitious certificates of deposit. 
• Church Secretary Sentenced to Federal Prison for Stealing from Church  
  •  Stroupe was the secretary/bookkeeper at the Clover ARP Church for over 38 years. Beginning in at least 2006 and continuing until April of 2013 Stroupe embezzled over $600,000 of church money.
• Credit Union Employee Sentenced to 33 Months in Prison for Credit Union Embezzlement  
  • She was the vault teller, drive-through window teller, and a counter teller. From April 2008 through September 2011, Robinson embezzled $420,000 from the credit union by creating a fictitious teller drawer to conceal withdrawals of cash, manipulating the credit union’s records regarding its receipt and disbursement of coins and currency, and entering false entries in the books and records for the vault, teller ledgers, teller drawers, and the automated teller machine.
• Sierra Army Depot Employee Indicted for Theft of Military Equipment  
  • on numerous occasions Herrin and Biggs removed U.S. military equipment from the Sierra Army Depot (SAID) buildings, adjusted item codes in the computer database to conceal their thefts and arranged to sell the equipment to various buyers. On one occasion, they loaded a military vehicle with equipment stolen from SIAD, drove the vehicle from SIAD to a parking lot just outside the SIAD gate, and sold the equipment to an individual whom they had arranged to meet.
• Bank Teller Sentenced to Prison for Stealing Money from CD Accounts 
•  Administrator Sentenced for Embezzling from County Court 
• Bank Employee Pleads Guilty to Embezzling from Bank 
• Fourth City Employee Pleads Guilty to Stealing Thousands of Dollars from Parking Meters 
• Acting Township Supervisor Charged with Defrauding Township Accounts for Personal Use 

Bribery/Kickbacks

The FBI encourages the public to report allegations of public corruption to (877) NO-BRIBE

• Army Contracting Official Pleads Guilty in Bribery and Kickback Scheme 
  • a former contracting official for the U.S. Department of the Army, pleaded guilty today to federal charges stemming from a scheme in which he accepted over $490,000 worth of benefits, including cash payments and vacations, from favored contractors. In return, he helped these businesses obtain millions of dollars in federal contracts.
• Employee of a U.S. Construction Company Working in Afghanistan Pleads Guilty to Receiving Illegal Kickback 
  • A former project manager of a U.S. construction company working on U.S. government contracts in Afghanistan who solicited a $60,000 kickback from an Afghan subcontractor 
• U.S. Navy Military Sealift Command Manager Sentenced for Receiving Bribes 
  • Toy joined an extensive bribery conspiracy that spanned five 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 Toy and to Scott B. Miserendino Sr., a former government contractor who performed work for the Military Sealift Command.
• City Employee Sentenced for Accepting $150,000 in Bribes from Contractor 
  • Perry accepted bribe payments from a Manufacturer’s Representative totaling approximately $150,000. Perry regularly directed the Manufacturer’s Representative to make the bribe payments by paying down debts owed by Perry, including payments on two home mortgages, one car loan, two home insurance policies, two car insurance policies, and eight credit cards. Perry accepted as bribe payments from the Manufacturer’s Representative, cruise vacations, domestic and international airline tickets, payments for hotels and theater tickets. 
• ‘Godfather’ of Camp Pendleton Sentenced to Two Years for Bribery  
  • A Department of Defense supervisor, the self-described “Godfather” of Camp Pendleton, was sentenced today to two years in prison for accepting over $100,000 in bribes from contractors who sought to win or retain government construction and service contracts at Camp Pendleton worth millions of dollars.
• Owner Engineering Firm Convicted of Paying Bribes to a Government Official   
  • admitted to paying bribes to a GSA employee who was in a position to recommend FLBE for GSA-managed contracts. The bribes included a $3,750 golf club membership and $2,000 in cash passed by the defendant to the GSA employee during lunch at a Tysons Corner, Virginia restaurant. On another occasion, Bituin offered the GSA employee other things of value in exchange for his assistance in obtaining GSA contracts, including access to a retirement home in Las Vegas, the down payment on a home in Virginia, and 5 percent of the equity in FLBE.
• Man Pleads Guilty to Conspiring to Launder Bribes Received in Afghanistan  
  • Soon after Jimmy Dennis began working as a paying agent, an Afghan interpreter offered him a $10,000 bribe/kickback to accept certain Afghan contractors onto the list of eligible contractors. Jimmy Dennis accepted the money and later accepted bribe payments from a second interpreter to allow additional vendors onto the list of eligible contractors. Jimmy Dennis estimated that he personally received about $250,000 in bribes.
• Two Former US Government Subcontractors Sentenced for Bribery, Conspiracy  
  • Hardman and White participated in a five-year bribery scheme in which they and several co-conspirators provided more than $265,000 in cash bribes, among other things, to two public officials working for the United States Navy Military Sealift Command (MSC), in an illegal effort to influence those public officials to provide favorable treatment to Hardman and White’s companies in connection with United States government contracting work.
• FBI Complaint Charges GSA Official with Accepting Bribes and Theft of Government Property  
  • The complaint alleges Cashman has been involved in the theft of government property and selling this property for his personal benefit. In addition, Cashman is alleged to have accepted bribes and gratuities in exchange for helping to steer hundreds of thousands of dollars worth of GSA contracts to a co-conspirator. The complaint alleges in about 2007, Cashman communicated and accepted services from a co-conspirator seeking to obtain GSA contracts. Cashman’s home was painted and windows installed in return for Cashman assisting this co-conspirator with obtaining GSA contracts. In 2008, Cashman allegedly engaged in a scheme with a co-conspirator to award a GSA contract to the co-conspirator in return that the co-conspirator would funnel $120,000 through a specified company. Agents determined the company that received the $120,000 subsequently made a series of payments to Cashman totaling $42,000. The complaint alleges that Cashman also engaged in a scheme with others involving the theft of thousands of dollars worth of copper and aluminum panels from the Otay Mesa Port of Entry. Cashman received a portion of the proceeds from the sale of this stolen property.
• Mayor of Río Grande Indicted on Charges of Bribery, Extortion, and Obstruction of Justice 
• New Orleans Mayor C. Ray Nagin Sentenced for Conspiracy, Bribery, Honest Services Wire Fraud, Money Laundering, and Tax Violations   
• Executive Director  Pleads Guilty to Conspiracy to Steal Government Funds and Solicit Kickbacks from Federally Funded Program

Fraud

• Boeing Subcontractor Pleads Guilty to Federal Fraud Charges 
  • Jeffrey Lavelle, owner and operator of J. L. Manufacturing pled guilty to multiple counts of mail and wire fraud in connection with a bribery/kickback scheme involving Boeing military aircraft parts.
• Iraq Extradites Fugitive Defense Contractor to U.S. to Face Fraud Charges
  • A Las Vegas-based former Department of Defense contractor has been extradited from Iraq to the United States to face fraud and conspiracy charges for attempting to bribe U.S. officials in order to secure government contracts for his companies. 
• Chief Financial Officer Pleads Guilty in Connection with $87 Million Fraud Scheme Involving US Government-Funded Construction Projects 
• Conspirator Sentenced to Prison in $2.3 Million US Government Contract Fraud Scheme 
  • The conspirators’ businesses often submitted extremely low bids to secure the contracts. Once awarded the contracts, Johnson enticed victim businesses to act as subcontractors and supply the goods required by contract by providing fake references and by falsely promising that the subcontractors would be paid after the government paid Johnson. After the subcontractors delivered the goods required by the contracts, government agencies paid Johnson, typically by electronic transfers to bank accounts set up in the business names but controlled by Johnson and his conspirators. Johnson and his conspirators fraudulently retained these proceeds for their own personal benefit and did not pay the subcontractors.
• Company, Its Owner, and Four Employees Plead Guilty to Fraud on US Defense Contracts  
  • To highlight one contract, the United States set out the defendants’ actions related to the provision of aviation locknuts. In 2008, KPI was awarded contracts to supply aviation locknuts to the DOD, which were used to secure the blades to the main rotary assembly of the Kiowa Helicopter. The locknuts were flight critical and of proprietary design to be acquired from only two approved manufacturers, SPS or Bristol Industries. Rather than obtain the locknuts from one of the approved sources, Nicholas Bettencourt contacted Coloc Manufacturing in Texas and arranged with them to make and deliver thousands of non-conforming locknuts for fulfillment of the contract. Coloc was unaware that the parts they were contracted to manufacture were proprietary and were to be used in a flight-critical military application. In August 2008, the defective locknuts were detected throughout the military supply chain, which triggered the issuance of a DOD-wide safety alert, a worldwide inspection of all aircraft and stockpiles. After DOD notified KPI about the defective parts, Nicholas Bettencourt provided the DOD officials with false information in an attempt to cover up the acquisition of the defective locknuts.
• City Clerk Sentenced to 21 Months’ Imprisonment for Defrauding City  
  • while working as the city clerk for the city of Masonville, she routinely issued herself fraudulent payroll and expense reimbursement checks. King further admitted she included fraudulently inflated bank account balances for the city’s bank accounts on reports King provided to the city council and to the Auditor for the State of Iowa in order to prevent anyone from discovering her fraud. At sentencing, the court determined King had defrauded Masonville of $81,524.24.
• Woman Indicted in $3 Million Fraud Scheme That Forced Employer into Bankruptcy 

 Hacking

• Hacker Charged with Breaching Multiple Government Computers and Stealing Thousands of Employee and Financial Records 
  • Love and his conspirators accessed without authorization protected computers belonging to DOE, HHS, U.S. Sentencing Commission, FBI’s Regional Computer Forensics Laboratory, Deltek, Inc. and Forte Interactive, Inc. Love and his conspirators gained unauthorized access to the protected computers by exploiting a known vulnerability in Adobe ColdFusion, a software program designed to build and administer websites and databases. The vulnerability, which has since been corrected, allowed Love and his conspirators to access protected areas of the victims’ computer servers without proper login credentials—in other words, to bypass security on the protected computers. After gaining unauthorized access to the protected servers, Love and his conspirators obtained administrator-level access to the networks using custom file managers, which allowed the conspirators to upload and download files, as well as create, edit, remove and search for data. Love unlawfully obtained massive amounts of sensitive and confidential information stored on those computers, including more than 100,000 employee records with names, Social Security numbers, addresses, phone numbers and salary information, along with more than 100,000 financial records, including credit card numbers and names. Love’s actions caused total losses in excess of $5 million.

Export Violations

• Chinese National Pleads Guilty to Arms Export Control Act Violations 
  • Bo Cai entered a guilty plea to a three-count superseding indictment charging him and his cousin, Wentong Cai, 29, a Chinese national in the United States on a student Visa, with a scheme illegally to export sensors primarily manufactured for sale to the U.S. Department of Defense for use in high-level applications, such as line-of-sight stabilization and precision motion control systems.