2006 CONFLICT OF INTEREST PROSECUTION SURVEY
1.
United States v. David H. Safavian
From
2002 to the beginning of 2004 David H. Safavian served as the Chief of Staff
for the Administrator of the General Services Administration (GSA). In 2002
lobbyist Jack Abramoff invited Safavian and several other Government officials
and lobbyists on a golf trip to St. Andrew's golf course in Scotland. Abramoff was to provide a private jet for transportation. In June 2002, Safavian
contacted his ethics official and asked for an opinion about whether he could
participate in the trip.
When
he asked for the opinion, he informed the ethics official that Abramoff did not
have any business with GSA at the time of the invitation and that he did all of
his work on Capitol Hill. But Safavian did not tell the ethics official that,
in fact, Abramoff was seeking to lease or purchase GSA-controlled property and
that he (Safavian) was assisting him with regard to that project. Based on the
information Safavian provided, the ethics official indicated that acceptance of
the trip was permissible.
Safavian
then accompanied Abramoff and the others on the trip. Several months later,
after receiving an anonymous tip, the GSA Office of the Inspector General
(GSA-OIG) opened an investigation into the trip. Almost a year after that
investigation was opened, the Washington Post published the first of a
series of articles about Abramoff's dealings with several Indian tribes. The
articles prompted the Senate Committee on Indian Affairs to conduct an
investigation into the trip. Safavian was questioned about his involvement in
the trip during both investigations. He responded to the questions verbally
and by providing documents. To both the GSA-OIG investigator and the committee
he made statements similar to those he had made to the ethics official.
In
June 2006 a jury found him guilty of one count of obstruction of justice under
18 U.S.C. § 1505, interfering with the investigation by the GSA-OIG. They
also found him guilty of three counts of making false statements or committing acts
of concealment under 18 U.S.C. § 1001(a) with regard to his communications
to the ethics official, to the GSA-OIG agent, and to the Senate committee: (1) guilty
of both concealing his assistance to Abramoff in GSA-related activities and of
falsely stating to the GSA ethics official that Abramoff did all of his work on
Capitol Hill when Safavian knew that prior to the trip Abramoff was seeking to
lease or purchase GSA-controlled property; (2) guilty of concealing from the
GSA-OIG agent his assistance to Abramoff in GSA-related activities; and (3)
guilty of falsely stating in a letter to the Senate committee that Abramoff did
not have any business with GSA at the time he invited Safavian on the trip when
Safavian knew that Abramoff was seeking to lease or purchase GSA-controlled
property.
In
October 2006, he was sentenced to 18 months in prison.
The
Public Integrity Section of the Criminal Division of the Department of Justice
handled the prosecution.
2.
United States v. Dr. Pearson "Trey" Sunderland III
As
the Chief of the Geriatric Psychiatric Branch of the National Institute of
Mental Health (NIMH), Dr. Trey Sunderland supervised NIMH's geriatric research
on Alzheimer's disease, including the creation and management of collaborations
with outside partners, such as other governmental agencies, educational
institutions, and businesses.
As
a senior employee at the agency, Sunderland was required to disclose annually
on his confidential financial disclosure report (OGE Form 450) the income he
earned from outside employment arrangements (including consulting work) and
travel expenses over $260. In addition, before he engaged in outside
employment, he was required to file a form with his agency ethics official
disclosing the name of the outside entity, the nature of the proposed
employment, and the compensation to be paid.
In
1997 representatives of Pfizer, Inc. approached Sunderland about the
possibility of the NIMH joining with its researchers on a project to uncover
new Alzheimer's biomarkers in the blood or cerebral spinal fluid of Alzheimer's
patients. Sunderland agreed to the collaboration between NIMH and Pfizer.
Between 1998 and 2003, Sunderland and his staff worked in their official
capacities on this project with Pfizer. In 1998, Sunderland also initiated
negotiations with Pfizer to work as a consultant on the same project. During
the next five years he worked as a consultant for Pfizer on this project. He
received retainer fees of $125,000, additional fees totaling $35,000 for
attending 14 one-day meetings at Pfizer, and related travel expenses.
Also
in 1998 Sunderland asked Pfizer to participate in another research project at
NIMH to compare levels of known biomarkers present in the cerebrospinal fluid
of Alzheimer's patients. Pfizer accepted. Between 1998 and 2003 Sunderland, as an employee of NIMH, worked with Pfizer on this project. But in July 1998, Sunderland negotiated with Pfizer to be paid as a consultant for his work on this same project.
Over the next five years he served as a consultant to Pfizer on the project and
was paid $125,000 in retainer fees.
Sunderland did not disclose to his supervisors at the
NIMH the existence of the Pfizer consultancy for the two research projects, or
the fees and expenses paid to him. He also failed to receive authorization
from the ethics officials to engage in the consultancy.
In
December 2006 Sunderland pleaded guilty to a violation of 18 U.S.C. §
208(a). Later that month he was sentenced to two years' probation. He was
also ordered to forfeit $300,000 and to perform 400 hours of community service.
The
District of Maryland handled the prosecution.
3.
United States v. Ryan H. Rainey
Ryan
H. Rainey served as a senior trial attorney in DOJ's Civil Rights Division,
Special Litigation Section, from January 2002 through April 1, 2005. Prior to joining the Civil Rights Division, he served as an Assistant United States
Attorney in the District of Columbia for seven years. During his time in the
Civil Rights Division, his responsibilities included investigating alleged
civil rights abuses of persons confined in certain institutions owned or
operated by, or on behalf of, state and local governments.
On
April 3, 2003, the DOJ Civil Rights Division opened an investigation into
alleged civil rights abuses at a juvenile correctional facility located in Stockton, California. Rainey served as the lead counsel in the Department's
investigation. But from February 2004 to June 2004, while serving as lead
counsel for the Department in the investigation, Rainey was negotiating
employment with the state of California to serve as a special master appointed
to monitor and oversee the state's reform of its juvenile facilities. One of
those facilities was the one that was the subject of the on-going DOJ
investigation. Rainey did not disclose the employment negotiations to his
supervisors. When the supervisors learned of the negotiations in June 2004,
they removed him from the investigation into the Stockton facility.
In
June 2006 Rainey pleaded guilty to violating 18 U.S.C. § 208(a),
participating personally and substantially in a Government investigation of an
entity while negotiating for employment with that entity. In his guilty plea,
he also admitted that he attempted to obstruct the Government's investigation
into his conduct by lying to investigators and then contacting a witness in an
effort to conceal his lie. In September 2006 he was sentenced to one year of
probation and ordered to pay a $3,000 fine.
The
Public Integrity Section of the Criminal Division of the Department of Justice
handled the prosecution.
3. United States v. Natalie Coker
and United States v. Dennis Michael Barrett
Natalie
Coker was the Associate Director of the Department of Veterans Affairs (VA)
Consolidated Mail Outpatient Pharmacy (CMOP) in Murfreesboro, Tennessee. Her supervisor,
Joseph Haymond, was the director of CMOP. Dennis Michael Barrett was the
owner/operator of a company that earned commissions from private companies by
placing the companies into contracts with the VA.
In
the summer of 2002, Coker and Haymond wanted Barrett to find a company that
could repackage or prepackage pharmaceuticals for the CMOP. Barrett mentioned
this to his business partner, Kevin Bowling. Bowling responded that his
father-in-law, Bob Allen, might be interested. Barrett met with Bowling
and Allen, who did express an interest. Barrett set up and attended a meeting
with Bowling, Allen, Coker, and Haymond. Coker explained the type of service
she was looking for and provided logistical information. At the meeting it was
determined that Coker would gather applicable quantity and pricing information,
and that Coker and Haymond would give the contract to Allen.
Allen
then formed a company called PrePak Systems, Incorporated, which he owned along
with Bowling and two others. Coker personally helped PrePak during the initial
stages of its organization by finding equipment, finding suppliers of bottles,
and dealing with regulatory issues. With Haymond, Coker also went to PrePak's
business location, checking out its size and location, looking at equipment,
and advising PrePak as to Government requirements.
In
addition, Coker helped Allen obtain a letter from the CMOP to show to lenders
that expressed the CMOP's interest in doing business with PrePak. She also
helped PrePak understand issues related to quantity and pricing of prepackaged
drugs.
Coker
subsequently awarded the contract to PrePak without competitive bidding.
Barrett, who received a commission on what the CMOP was paying PrePak,
estimated that CMOP paid PrePak hundreds of thousands of dollars for this work.
During
this time, Coker was negotiating for employment with PrePak. Allen asked
Barrett whether Coker or Haymond would be interested in a position with PrePak
as a full-time pharmacist. Barrett responded that Coker might be interested.
Allen talked with Coker, who was receptive to Allen's offer. She negotiated
with Allen regarding prospective employment with PrePak through a series of
e-mails with Allen. In these e-mails, they discussed possible terms of employment,
including compensation, relocation to Cookeville, Tennessee, and a work
schedule. Ultimately, she declined the offer of employment. Coker had
received periodic ethics training, which included the restrictions on
negotiating for employment.
In
March 2006 Coker pleaded guilty to violating 18 U.S.C. § 208(a),
participating personally and substantially in a particular matter involving
PrePak while negotiating for employment with the company. On October 16, 2006, she was sentenced to 46 months in prison and a $10,000 fine. Barrett
also pleaded guilty of violating 18 U.S.C. § 208(a) and was sentenced on October 19, 2006 to two years probation and a $5,000 fine.
The
Middle District of Tennessee handled the prosecution.
5.
United States v. Bobby L. Jolley
Bobby
L. Jolley, the director of the War Fighting Center at I Corps at Fort Lewis, Washington, was required to file annually a confidential financial disclosure
report (OGE Form 450). In that report he was required to list his assets and
income, among other financial information. Jolley owned a ranch called
Woodland Farm. He failed to disclose his ownership of the ranch on the OGE
Form 450.
Jolley
pleaded guilty to one count of violating 18 U.S.C. § 1018, making and
delivering a false certificate or writing. He was sentenced to six months
unsupervised probation and a $2,500 fine.
The
Western District of Washington handled the prosecution.
6.
United States v. Anthony Mingo
From
mid 2003 until late 2004, Anthony J. Mingo was a paid consultant to Management
Control Systems (MCS), a small Government contractor owned by Nadine Lucas. In
the summer of 2003, Mingo helped prepare the paperwork necessary for MCS to
obtain a GSA contract to supply IT services and parts to the Department of
Public Works at the Navy base at Dahlgren, Virginia. In connection with the
GSA contract, Mingo and Lucas received significant help from a Navy civilian
employee, Michael Causer, the Supervisor of Public Works at the Dahlgren
facility. Shortly after Lucas' company was awarded the GSA contract, Lucas
told Mingo that she wanted to reward Causer for his assistance in obtaining the
contract. Causer had previously told Lucas that he wanted to buy a tractor for
his five-acre residence. Mingo discussed the matter with Causer and in
November 2003 arranged for the purchase of a $22,000 Kioti tractor and
delivered it to Causer's residence. Mingo also helped facilitate bid rigging
that Causer had engineered in order to direct additional Dahlgren business to
Lucas' company.
In
December 2006 Mingo pleaded guilty to violating 18 U.S.C. § 209, illegally
supplementing the salary of a Federal official by purchasing a new tractor for
him. He was sentenced to two years supervised probation, a $12,000 fine,
and 150 hours of community service. Causer had pleaded guilty to his role in
the bid rigging scheme in November 2006. He was sentenced to 15 months in
prison and ordered to pay $252,000 in restitution to the United States. In February 2007 Lucas pleaded guilty to conspiracy to pay illegal gratuities to a Federal
official (Causer). She was sentenced to four months in prison and an
additional four months of home detention. She was also ordered to pay $20,000
in restitution.
The
Eastern District of Virginia handled the prosecution.
7.
United States v. Cynthia Jameson
Cynthia
Jameson, an employee of the General Services Administration (GSA), was the
Director of the Kentucky Property Management Center at the GSA office in Louisville, Kentucky. In this position, she had authority over a number of GSA contractors,
including one contractor who employed Jameson's live-in companion. Jameson
also had two dependent children who were employed by the same GSA contractor on
an intermittent basis. During the time that her live-in companion and children
worked for the contractor, Jameson participated personally and substantially
through the decision, approval, and recommendation of Government contracts to
that contractor, actions that financially benefited her.
In
August 2006 Jameson pleaded guilty to violating 18 U.S.C. § 208(a) by
participating in the approval or recommendation of a Government contract in
which she had a financial interest. She was sentenced to 24 months probation,
a $1,000 fine, and a $25 special penalty assessment.
The
Western District of Kentucky handled the prosecution.
8. United States v. Hardrick
Crawford, Jr.
While serving as the Special Agent in Charge
of the FBI's El Paso Division, Hardrick Crawford, Jr. accepted substantial
gifts from a Mexican racetrack owner and sometime FBI informant. In addition,
Crawford did not disclose the gifts on his public financial disclosure report
(SF 278).
In
August 2006 a Federal jury found Crawford guilty of violating 18 U.S.C. § 1001,
making false statements on his public financial disclosure report for calendar
year 2002 and concealing material facts from the FBI regarding his association
with the racetrack owner. In January 2007 Crawford was sentenced to six months
in prison, a $10,000 fine, and three years supervised release during which
time he must complete 200 hours of community service.
The
Western District of Texas handled the prosecution.
9.
United States v. Robert W. Ney
From
January 1995 to January 2007 Robert W. Ney served as an elected member of the U.S.
House of Representatives for the 18th Congressional District in
Ohio. In September 2006, the Department of Justice charged Ney with
conspiring with several individuals (Jack Abramoff, Neil Volz, Tony Rudy,
Michael P.S. Scanlon, an unnamed Congressional staffer, and an
unnamed foreign businessman) to use mail and interstate wire communications to
deprive the public of the honest services of Ney and his staff, to commit false
statements, and to aid and abet a violation by former Congressional staff member
Volz of the one-year lobbying ban. The Department also charged him with making
false statements on Government forms by concealing and misrepresenting his
receipt of items of value from his co-conspirators.
The
facts supporting these charges are as follows. From 2000 through April
2004 Ney and members of his staff solicited and accepted items of value from
the foreign businessman, Abramoff, Scanlon, Volz, Rudy, and other lobbyists
working for Abramoff with the intent to be influenced and induced to take a
series of official actions. The items that Ney solicited and accepted from Abramoff
and other lobbyists included the following: 1) all-expense-paid trips and
reduced-price trips to Scotland to play golf, to New Orleans to gamble and
vacation, and to Lake George, New York to vacation; 2) meals and drinks at
Washington, D.C. restaurants; and 3) tickets to use Abramoff's box suites to
attend sporting events. In exchange, Ney supported or opposed legislation at
Abramoff's request.
Ney
also accepted an all-expense-paid trip to London to meet with the foreign
businessman to discuss strategies to alter U.S. laws prohibiting the
businessman from selling airplanes and parts in a foreign country. During the
trip, the foreign businessman gave Ney and his staff thousands of dollars in
gambling chips to use at casinos. Ney won additional money while gambling. He
and his staff brought the money into the U.S., but he failed to report to
Customs Service officials the total amount that he brought in.
Finally,
Ney allowed and encouraged Volz, his former Chief of Staff, to lobby Ney and
his staff on various issues from February 2002 through February 2003. Ney knew
that such activity was in violation of the one-year lobbying ban. Volz had
left Government service in February 2002.
The
second charge includes Ney's false statements on Government forms with regard
to the trips paid for by his co-conspirators. On his travel disclosure form,
which he filed with the U.S. House of Representatives, Ney substantially
under-reported the expenses paid by Abramoff and his clients for the golf trip
to Scotland, and he mischaracterized the purpose of the trip. In connection
with the trip to London, he underreported on his travel disclosure form the expenses
that had been paid by private sources.
The
second charge also encompasses false statements he made on two of his annual
financial disclosure statements. On his 2002 statement he mischaracterized the
purpose of the Scotland trip and failed to disclose as gifts the golf expenses
as well as the tickets, meals, and entertainment provided by Abramoff and the other
lobbyists working with Abramoff. On his 2003 statement he failed to disclose
trips, tickets, meals, and entertainment provided by Abramoff and the other
lobbyists working with Abramoff, including gifts of free travel,
accommodations, and other expenses associated with trips that Ney took to Lake George, New York and New Orleans, Louisiana. He understated his receipt of
gifts and omitted as the source of those gifts the foreign businessman by
reporting that he had won $34,000 playing a game of chance at a casino. He
also intentionally failed to include thousands of additional dollars he
received.
Ney
pleaded guilty in October 2006 to one count of a violation of 18 U.S.C. § 371, conspiracy
to commit multiple offenses including honest services mail and wire fraud (18 U.S.C.
§§ 1341, 1343, and 1346),
making false statements (18 U.S.C. § 1001), and violations of his former
chief of staff's one-year lobbying ban (18 U.S.C. § 207(e)). He also pleaded
guilty to one count of making false statements to the U.S. House of
Representatives in violation of 18 U.S.C. § 1001(a)(2). In January 2007 he
was sentenced to 30 months in prison to be followed by two years supervised
release. He was also fined $6,000, ordered to pay a special assessment of
$200, and ordered to perform 600 hours of community service for each year of
supervised release.
The
Public Integrity Section of the Criminal Division of the Department of Justice
handled the prosecution.
10.
United States v. Roger G. Stillwell
Roger
G. Stillwell, an employee of the Department of the Interior, was the desk
officer for the Northern Mariana Islands from 2001 to August 11, 2006. In the 1990s, he had been a Washington-based consultant for the territory. It was
during this time that he met Jack Abramoff, a Washington lobbyist. Abramoff
was helping the islands resist congressional efforts to establish minimum wage
and immigration laws in the territory. The governor of the territory at that
time asked Stillwell to teach Abramoff the history of the islands in
preparation for the lobbying campaign.
During
this time Stillwell and Abramoff developed a personal friendship. It was also
during this time that Abramoff began giving Stillwell and his family sporting
and concert tickets. Stillwell offered to pay for the items, but Abramoff
would tell Stillwell that the tickets were for unused seats and he wanted to
give them to a friend.
When
Stillwell became an employee of the Department of the Interior, the gift-giving
did not stop. In 2003 he accepted from Abramoff tickets to a Washington
Redskins game and to a Simon and Garfunkel concert. The total value of these
tickets was $482. He falsely certified on his confidential financial
disclosure report that he had not received gifts totaling more than $285.
Stillwell
was charged with one count of falsely certifying on his financial disclosure
report that he had not received any reportable gifts, a violation of
18 U.S.C. § 1018. In August 2006 Stillwell pleaded guilty to
violating 18 U.S.C. § 1018. In January 2007 he was sentenced by the
District Court of the District of Columbia to two years probation and fined
$1,000.
The
Public Integrity Section of the Criminal Division of the Department of Justice
handled the prosecution.
11.
United States v. Randall "Duke" Cunningham
Randall
"Duke" Cunningham was the U.S. Representative from the 50th
Congressional District in California from 1991 to 2005. During his service as
a U.S. Representative, Cunningham accepted numerous bribes from several
co-conspirators in exchange for taking official action to influence the
appropriation of funds and the execution of Government contracts in ways that
benefited two of the co-conspirators, who were majority owners of defense
contracting companies. Specifically, he sold his home in Del Mar, California at an artificially inflated price to a defense contractor whom he later helped obtain
Government contracts. Another defense contractor paid off the mortgage on
Cunningham's new home in Rancho Santo Fe. A third co-conspirator made the down
payment on Cunningham's condominium in Arlington, Virginia. Defense contractors
also purchased a yacht and a Rolls Royce for Cunningham, paid for a graduation
party for his daughter, and paid for jewelry, home furnishings, and travel and
hotel expenses. Cunningham did not disclose these benefits on his annual
financial disclosure reports filed with the U.S. House of Representatives.
In
November 2005 Cunningham pleaded guilty to committing tax evasion and to
conspiring to commit bribery, honest services fraud, and tax evasion. In March
2006 he was sentenced to 100 months in prison to be followed by three
years' supervised release. He was also ordered to pay $1,804,031.50 in
restitution for back taxes, penalties and interest owed to the Government and
to forfeit an additional $1,851,508 in U.S. currency based upon the cash
payments he received during the conspiracy.
The
Southern District of California handled the prosecution.
12. United States v. Karla R. Kronstein,
United States v. Michael G. Kronstein, and United States v. Kenneth
N. Harvey
Kenneth
N. Harvey was the chief of the Acquisition Logistics and Field Support Branch
within the U.S. Army Intelligence and Security Command (INSCOM) at Fort Belvoir , Virginia. He was responsible for recommending the award, modification, and
payment of maintenance and logistics contracts in support of INSCOM missions
throughout the world. Michael G. Kronstein was the owner and chief executive
officer of Program Contract Services, Inc. (PCS). In November 1998, Harvey recommended that INSCOM award a sole-source maintenance and logistics contract to
PCS. Following the contract award, Harvey recommended various modifications to
the contract, many of which increased the total contract payout to Mr.
Kronstein's company. Harvey also reviewed and approved payments to PCS.
In
exchange for these acts, Mr. Kronstein caused payments totaling more than
$40,000 to be made to Harvey's spouse and third parties for Harvey's benefit.
On four occasions, Mr. Kronstein directed his wife Karla to write the
checks for these payments.
Mr.
Kronstein also offered Harvey employment with PCS at the same time Harvey oversaw a final modification to the contract. Harvey concealed the payments and the
offer of employment from his superiors at INSCOM.
In
October 2006 Karla Kronstein pleaded guilty to violating 18 U.S.C. § 209,
illegally supplementing the salary of a Government employee. She was sentenced
to three years probation and ordered to pay a $25 special assessment. Pursuant
to the plea agreement, Karla waived her testimonial spousal privilege and
testified at trial against her husband and Harvey.
In
December 2006 a Federal jury convicted Michael Kronstein and Harvey of two
counts each of honest services wire fraud and one count each of bribery. In
March 2007 Michael Kronstein was sentenced to 70 months in prison, and Harvey was sentenced to 72 months in prison. Both defendants were also sentenced to
three years of supervised release and jointly ordered to pay more than $383,000
in restitution.
The
Public Integrity Section of the Criminal Division of the Department of Justice
handled the prosecution.
13.
United States v. Lester M. Crawford
Over
a period of years, Lester M. Crawford held several senior positions within the
Food and Drug Administration (FDA): Deputy Commissioner between February 2002
and March 2004, Acting Commissioner between March 2004 and July 2005, and
finally Commissioner between July 2005 and September 2005, when he resigned.
As a senior FDA employee, he was required to file annual public financial
disclosure reports (SF 278). In February 2005 when he was selected for the
post of Commissioner, he was required to file with the Senate committee hearing
his nomination a nominee SF 278 and a Statement for Completion by Presidential
Nominees. On the SF 278, he was required to list assets having a value that
exceeded $1,000 and that either he or his wife held during the applicable
reporting period. He was also required to disclose any assets that produced
more than $200 in income during the reporting period. Any FDA employee who was
required to file an SF 278 could not hold a financial interest, such as stock
or stock options, in a "significantly regulated industry." Federal regulations
define such industries as organizations for which the sales of products
regulated by the FDA constitute ten percent of more of annual gross sales in
the organization's previous year.
During
the relevant time periods, Crawford and/or his wife owned stock or stock
options in Pepsico, Sysco, Kimberly-Clark, and Embrex, all of which were
significantly regulated organizations. On the SF 278 and in an e-mail to an
agency ethics official, Crawford failed to disclose his and his wife's
ownership of this stock. In July 2004, he filed an SF 278 in which he did list
the Sysco and Kimberly-Clark stock. But when an agency ethics official later
inquired about his ownership of the stock, Crawford responded in an e-mail that
he had sold the stock. In fact, he had not sold the stock. In February 2005,
he did not disclose on his nominee SF 278 his exercise of Embrex stock options
or the ownership of Sysco or Kimberly-Clark stock. He also did not disclose
his exercise of the Embrex options on his February 2005 Statement to the Senate
Committee. The omissions on the SF 278s and in the e-mail were the basis of a
false writings charge.
A
conflict of interest charge arose out of his and his wife's ownership of Sysco
and Pepsico stock. He was the Chairman of the FDA's Obesity Working Group
(OWG). In 2004 he and the OWG's Vice Chairman submitted a report on obesity to
the FDA Commissioner at the time. The report contained many recommendations, including
encouraging manufacturers to re-label serving sizes on products such as sodas.
Pepsico is a manufacturer of sodas and snack food, and Sysco is a manufacturer
of food products. By participating in the working group and its
recommendations, he participated personally and substantially in a particular
matter in which he and his wife had a financial interest.
In
October 2006 Crawford pleaded guilty to violating 18 U.S.C. § 208,
participating in a particular matter in which he and his wife had a financial
interest, and 18 U.S.C. § 1018, making false writings by failing to disclose his
and his wife's ownership of certain stock and stock options on his public
financial disclosure form and in an e-mail. In February 2007 he was sentenced to
three years of supervised probation. He was
also ordered to pay a fine of $90,000, perform 50 hours of community service,
and pay the costs of his probation.
The
District of Columbia handled the prosecution.
14.
United States v. Bonnie Murphy
Bonnie
Murphy, a Defense Department employee, deployed to Iraq in December 2003 as
part of a Defense Reutilization and Marketing Service (DRMS) team. She and
other DRMS employees were responsible for managing and disposing of surplus DoD
property, including hazardous waste. From July through December 2004, she
accepted several pieces of gold jewelry worth approximately $9,000 from the
owners and employees of an Iraqi contracting company.
Between
July and October 2004, this company received three service contracts from the
U.S. Army. Before each contract award, Murphy wrote a statement of work requesting
that the U.S. Army hire a contractor to perform the disposal of hazardous
waste, the removal of contaminated soil, and the removal and storage of used
lithium batteries. She verbally recommended that the Iraqi company be hired
for each contract and she wrote a sole source justification letter recommending
that it receive the lithium battery contract without undergoing a competitive
bidding process. She also oversaw each contract -- authorizing the company to
do work, monitoring its performance, and certifying its invoices.
In
November 2006 Murphy pleaded guilty to a violation of 18 U.S.C. § 209,
accepting illegal compensation from the Iraqi contractor for helping it obtain
U.S. Army contracts. In March 2007 she was sentenced to one year
probation and a $1,500 fine.
The
Public Integrity Section of the Criminal Division of the Department of Justice
handled the prosecution.
15.
United States v. Jane G. Selby
Jane
G. Selby was a manager at the Bonneville Power Administration (BPA). Knowmadic
was a company that sold software and software-related services to BPA. A Federal
investigation revealed that while employed by the BPA, Selby solicited
Knowmadic to hire her husband as a salesman and then used her influence at BPA
to advocate for the expanded use of the contractor's software products. In
addition, she participated in matters related to BPA's use of Knowmadic
software as part of a scheme to defraud BPA. Finally, the investigation
revealed that she made false statements in connection with her dealings with
Knowmadic, attempted to obstruct the investigation, and tampered with a
witness.
In
December 2006, a Federal jury convicted Selby of violations of 18 U.S.C. §§ 208
(participating personally and substantially in a matter in which she had a
financial interest), 1001 (making a false statement) and 1343 (wire fraud). In
May 2007 she was sentenced to five years probation on the condition, among
others, that she reside in a Bureau of Prisons contract facility for four
months.
The
District of Oregon prosecuted the case.
16.
United States v. Michael J. Peters
Michael
J. Peters worked as a Senior Analyst in the Office of the Administrator for
NASA. His job was to evaluate and recommend financial software so that NASA's
senior leadership could access the various NASA centers' budgets and
expenditures from a central location. Peters recommended that NASA purchase a
software product from Open System Sciences (OSS). At the same time, OSS was paying Peters, through an intermediary, $25,500 to develop and market the OSS software product. In addition, Peters intentionally omitted information about OSS's payments to him and disguised the payment on his public financial disclosure report
(SF 278). He was also required to file a Questionnaire for National
Security Position, which required him to list all employment activities,
including part-time work. He did not list OSS or the intermediary on this
form.
In
October 2006, a Federal grand jury indicted him on three counts: (1)
conspiracy to accept gratuities, a violation of 18 U.S.C. §§ 371 and
201(c)(1)(B); (2) making false statements, a violation of 18 U.S.C. §
1001(a)(2); and (3) engaging in acts affecting a financial interest, a violation
of 18 U.S.C. § 208(a). In November 2006 Peters pleaded guilty to the charges
of making false statements and of engaging in acts affecting a financial
interest. In March 2007 he was sentenced to two years
probation, a fine of $25,500, and 500 hours of community service.
The
District of Columbia handled the prosecution.
17. United States v. Michael Rzeplinski,
United States v. Connie Davidson, and United States v. Kirsten
Davidson
Michael
Rzeplinski served as a programs director for the General Services
Administration (GSA) and as a supervisory engineer for the U.S. Army. Connie
Davidson was a GSA employee who resided with Rzeplinski. Kirsten Davidson is
Connie's daughter. In February 2002, Rzeplinski caused a project to be awarded
to Aquila Management to provide IT-related services at Fort Monmouth, New Jersey. He asked Aquila Management to hire Kirsten to perform computer-related work
under his direction. The company then hired her, but she did not perform any
work. Between February 2002 and February 2005, Aquila Management billed the
Army, and Rzeplinski approved, the payment of approximately $283,000 in claims
for work that Kirsten did not perform.
Rzeplinski
also recommended that a GSA IT-related services task order be awarded to PCC
Technology Group, Inc. He asked that company to hire Kirsten to perform
computer-related work under his direction. The company did hire her, but again
she performed no work. Between January 2003 and October 2005, PCC was
paid approximately $555,710 on this contract and on a separate GSA contract as
a subcontractor for work that Kirsten never performed.
Rzeplinski
caused PCC to hire a company called RZED Engineering Services (ZED), a sole
proprietorship he controlled, as a subcontractor. From June 2002 until October
2005, PCC mailed monthly checks in the amounts of $4,000 to $4,500 to
Rzeplinski. He received a total of $151,500, but ZED never performed any work
as a subcontractor.
Rzeplinski
failed to file Federal income tax returns for the years 2002, 2003, and 2004,
even though he did have taxable income during those years.
Kirsten
Davidson admitted to Federal officials that she knew Rzeplinski agreed to get
her jobs with both Aquila and PCC, that she was on the payrolls of the two
companies, and that she did not perform any work for any pay. She received
approximately $282,000 as a result of these arrangements.
Connie
Davidson was appointed to be the assistant contracting officer's representative
on the task order awarded to PCC. Her job duties included the responsibility
to report to GSA any instances in which PCC made claims for payment for work
that had not been performed. She admitted to Federal officials that in her
capacity as a GSA employee she was aware that Rzeplinski had recommended the
award of the task order to PCC and that he intended to have PCC hire her
daughter Kirsten to perform work on the contract. Connie Davidson also knew
that PCC was paying her daughter and that her daughter did not perform any work
for PCC.
In
August 2006 the three defendants pleaded guilty to charges in connection with
these activities, and they were sentenced in January 2007. Rzeplinski pleaded
guilty to tax evasion and to conspiracy to defraud the United States by making false claims. He was sentenced to 46 months in prison and ordered to pay
$862,710 in restitution. Kirsten Davidson pleaded guilty to conspiracy to defraud
the United States by making false claims. She was sentenced to 18 months in
prison and ordered to pay $290,647 in restitution. Connie Davidson pleaded
guilty to aiding and abetting the submission of false claims. She was
sentenced to 12 months in prison and ordered to pay $395,710 in restitution.
The
District of New Jersey handled the prosecution.
18. United States v. Dr. William L. Smith, Sr.
From
August 1997 to January 2004 Dr. William L. Smith, Sr. was employed by the
National Aeronautics and Space Administration (NASA) at Langley Research Center. He held various positions, and in 1999 he began serving as Senior Scientist,
Atmospheric Sciences Competency, and as Principal Investigator for major
airborne and satellite experiment programs. The latter position included
responsibility for contracts awarded under the programs.
In
2001, while serving as Senior Scientist and Principal Investigator for the
contracts between NASA and the University of Wisconsin, Dr. Smith allegedly
engaged in negotiations with the University of Wisconsin for a Distinguished
Professor position following his retirement from NASA, in violation of
18 U.S.C. § 208(a).
In
June 2006 the United States and Dr. Smith entered into a civil settlement under
which Dr. Smith agreed to pay the United States a $7,500 civil penalty and the
United States agreed to release Dr. Smith from any civil claims it had against him
under 18 U.S.C. § 208. Under the terms of the agreement, Dr. Smith did
not admit liability.
The
Civil Division of the Department of Justice handled the case.
19. United States v. John R. Van
Rosendale
John R. Van Rosendale, an employee of the
Department of Energy, was required by 5 U.S.C. app. § 104 to file a
termination public financial disclosure report when he left his Government
position. According to the United States, he knowingly and willingly failed to
do so.
The
United States and Mr. Van Rosendale entered into a civil settlement under
which Mr. Van Rosendale agreed to pay a $2,500 civil penalty.
The
Civil Division of the Department of Justice handled the case.
