FORMER ARMY CONTRACTOR GETS 39 MONTHS IN PRISON FOR BRIBERY

The following excerpt is from the Department of Justice website:
Tuesday, March 20, 2012
Former Army Contractor Sentenced to 39 Months in Prison for Role in Bribery and Money Laundering Scheme Related to DoD Contracts To Date, 17 Individuals Have Pleaded Guilty or Been Convicted at Trial in Ongoing Corruption Investigation
WASHINGTON –Terry Hall, 45, was sentenced today in Birmingham, Ala., to 39 months in prison for his participation in a bribery and money laundering scheme related to bribes paid for contracts awarded in support of the Iraq war, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division.

U.S. District Court Judge Virginia Emerson Hopkins for the Northern District of Alabama also ordered Hall to serve one year of supervised release following the prison term.  Hall has agreed to forfeit $15,757,000 as well as real estate and a Harley Davidson motorcycle.

Hall pleaded guilty on Feb. 18, 2010, to bribery conspiracy and money laundering and agreed to testify against his co-defendants, former U.S. Army Major Eddie Pressley and his wife, Eurica Pressley.  The Pressleys were convicted on March 1, 2011, of bribery, conspiracy to commit bribery, honest services fraud, money laundering conspiracy and engaging in monetary transactions with criminal proceeds.

The case against Hall and the Pressleys arose from a corruption probe focusing on Camp Arifjan, a U.S. military base in Kuwait.  As a result of this investigation, 17 individuals, including Hall, have pleaded guilty or been found guilty at trial for their roles in the scheme.

According to evidence presented at the Pressleys’ trial, from spring 2004 through fall 2007, Hall operated and had an interest in several companies, including Freedom Consulting and Catering Co. and Total Government Allegiance.  The companies received more than $20 million from contracts and blanket purchase agreements (BPAs) – a contract that allows the U.S. Department of Defense (DoD) to order supplies on an as-needed basis at a pre-negotiated price – to deliver bottled water and erect security fences for the U.S. military in Kuwait and Iraq.

Hall testified that, to obtain the contracting business and facilitate unlawful payments by other contractors, he made more than $3 million in unlawful payments and provided other valuable items and services to U.S. Army contracting officials stationed at Camp Arifjan, including to Eddie Pressley and former U.S. Army Majors John Cockerham, James Momon, Christopher Murray and Derrick Shoemake.

According to Hall’s testimony and other evidence presented at the Pressley trial, Eddie Pressley demanded a $50,000 bribe before he would issue bottled water orders or “calls” to Hall.  Hall testified that in April 2005, he and his associates arranged for Pressley to receive the money in a bank account established in the name of a shell company, EGP Business Solutions Inc., which was controlled by Eurica Pressley.

Hall testified that soon after the $50,000 bribe was paid, Pressley and Cockerham, another U.S. Army contracting official, increased the bribe demand to $1.6 million, which consisted of $800,000 for Pressley and $800,000 for Cockerham.  After Hall and others agreed to pay the money, Pressley and Cockerham issued calls for bottled water and fencing, arranged for Hall to receive a fence contract and modified Hall’s agreement to remove the upper limit of the money Hall could receive from the DoD under the bottled water BPA.

Evidence at trial also showed that Eddie Pressley enlisted the help of his wife, Eurica, to receive the bribes.  Eurica Pressley traveled to Dubai with Hall in May 2005 and to the Cayman Islands in June 2005 to open bank accounts to receive the bribe money.  Hall testified that he and the Pressleys attempted to conceal the true nature of their corrupt scheme by having Eurica Pressley execute bogus “consulting agreements.”  They also prepared false invoices that were designed to justify the bribe payments as payment for non-existent “consulting services.”

Hall testified that, in total, he transferred approximately $2.9 million in bribe payments to the Pressleys, approximately $1.6 million of which consisted of payments from other contractors that Hall facilitated for Eddie Pressley.  Bank statements, wire transfer reports and other records presented at trial showed that the Hall and Eddie Pressley used approximately $2.9 million of the money to purchase commercial real estate in Muscle Shoals, Ala.

In addition, Hall testified that, after Eddie Pressley and Cockerham left Kuwait, he paid Momon more than $300,000, approximately $100,000 of which consisted of unlawful payments from another corrupt military contractor, which Hall facilitated by routing the money through bank accounts in Kuwait controlled on Hall’s behalf.  In exchange, Momon issued calls under Hall’s bottled water BPA worth more than $6.4 million.  Hall also testified that he paid Murray approximately $30,000 in exchange for official acts that benefited Hall and his companies.

On Jan. 5, 2012, Eddie Pressley was sentenced to 144 months in prison, and on Feb. 23, 2012, Eurica Pressley was sentenced to 72 months in prison.

On Aug. 13, 2009, Momon pleaded guilty to receiving approximately $1.6 million in bribes and agreed to pay $5.7 million in restitution.  Momon’s sentencing has not yet been scheduled.  On Jan. 8, 2009, Murray pleaded guilty to charges of bribery and making a false statement.  He was sentenced on Dec. 17, 2009, to 57 months in prison and ordered to pay $245,000 in restitution.  On Jan. 31, 2008, Cockerham pleaded guilty to participating in a bribery and money laundering scheme at Camp Arifjan.  He was sentenced on Dec. 2, 2009, to 210 months in prison and ordered to pay $9.6 million in restitution.  On June 9, 2011, Shoemake pleaded guilty to two counts of bribery, including receiving $215,000 from Hall.  He is scheduled to be sentenced on April 18, 2012.

The case is being prosecuted by Trial Attorneys Peter C. Sprung and Edward J. Loya Jr. of the Criminal Division’s Public Integrity Section.  Assistance was also provided by the Criminal Division’s Office of International Affairs.  The cases are being investigated by the U.S. Army Criminal Investigation Command, Defense Criminal Investigative Service, U.S. Immigration and Customs Enforcement, FBI, Internal Revenue Service - Criminal Investigation, Special Inspector General for Iraq Reconstruction and the International Contract Corruption Task Force (ICCTF).  The ICCTF is a joint law enforcement agency task force that seeks to detect, investigate and dismantle corruption and contract fraud resulting from U.S. Overseas Contingency Operations worldwide, including in Kuwait, Afghanistan and Iraq.

U.K. CITIZEN AND 2 AMERICANS CHARGED WITH CONSPIRACY TO DEFRAUD THE U.S. GOVERNMENT

The following excerpt is from the U.S. Department of Justice website:
Tuesday, March 13, 2012
WASHINGTON – United Kingdom citizen Ahmed Sarchil Kazzaz and his company, Leadstay Company, were charged in an indictment unsealed today in the Northern District of Alabama for their roles in a conspiracy to defraud the United States and pay kickbacks in exchange for receiving subcontracts for a Department of Defense program in Iraq, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division and U.S. Attorney Joyce White Vance of the Northern District of Alabama.

Kazzaz, 45, and Leadstay were charged with one count of conspiracy to defraud and commit offenses against the United States; six counts of unlawful kickbacks; one count of wire fraud; and three counts of mail fraud.   Kazzaz was arrested on Feb. 14, 2012, in Los Angeles.   In addition, two informations filed in the Northern District of Alabama were unsealed today, charging Gaines R. Newell Jr., 52, and Billy Joe Hunt, 57, with conspiracy to commit the federal offenses of kickbacks, wire fraud and mail fraud, and with filing false tax returns.

According to the indictment, Kazzaz paid more than $947,500 in unlawful kickbacks to two employees of a prime contractor to the United States government in order to obtain lucrative subcontracts for himself and Leadstay, in connection with the Coalition Munitions Clearance Program (CMCP).   CMCP is operated in Iraq by the U.S. Army Corps of Engineers, Huntsville Engineering and Support Center (HESC).   HESC, located in the Northern District of Alabama, operated the CMCP to clear out, store and dispose of weapons that were seized or abandoned in Iraq since the 2003 invasion.   HESC awarded a contract to perform this work to an international engineering and construction firm headquartered in Pasadena, Calif.

The indictment alleges that beginning in about March 2006, Kazzaz entered into a kickback agreement with the California prime contractor’s program manager and deputy program manager, who arranged for the award of subcontracts to Kazzaz and Leadstay to provide materials, heavy equipment and operators for equipment for the CMCP.   Kazzaz also allegedly obtained multiple funding increases to those subcontracts.   From April 2006 through August 2008, Kazzaz and Leadstay received more than $23 million in U.S. funds for services under the CMCP.

According to the two informations unsealed today, Newell was the program manager in Iraq for the California-based prime contractor to HESC, and Hunt was the deputy program manager.  Both are charged with conspiring to solicit and accept kickbacks to award subcontracts under the CMCP program and to commit mail and wire fraud by knowingly and intentionally devising a scheme to defraud the United States.   In addition, both are charged with failing to report the kickback income on their federal tax returns.

“Mr. Kazzaz allegedly paid kickbacks to two employees of a California-based contractor in order to secure subcontracts for Department of Defense programs in Iraq,” said Assistant Attorney General Breuer.   “Federal contracts must be won or lost based on the merits of the bid, and we will continue to take aggressive steps to hold accountable anyone who tries to play by their own set of rules instead.”

“Government contracts fraud is an insult to all law-abiding taxpayers,” said U.S. Attorney Vance.  “These defendants’ conduct was even worse in that they tried to illegally profit from defense contracts in Iraq, where American men and women were willing to put their lives on the line for freedom.”

“These charges clearly demonstrate that we will take firm action against those who make illegal payments while engaged in wartime contracting,” said Stuart W. Bowen, Special Inspector General for Iraq Reconstruction (SIGIR).   “SIGIR and its investigative partners will continue our vigorous pursuit of those whose illegal acts undermined the U.S. government’s management of the stabilization and reconstruction effort in Iraq.”

“Individuals and businesses that illegally enrich themselves at the expense of the U.S. taxpayer, especially as wartime profiteers, or those who diminish the combat readiness or effectiveness of the U.S. military, will be aggressively investigated by DCIS and our investigative partners,” said Defense Criminal Investigative Service (DCIS) Special Agent in Charge Chris D. Hendrickson.  “The combined investigative effort, the Department of Justice and the U.S. Attorney’s Office’s work demonstrate the combined federal commitment to combating fraud, waste and abuse.”

“IRS Criminal Investigation provides financial expertise with our law enforcement partners,” said Special Agent in Charge Leslie P. DeMarco of the Internal Revenue Service Criminal Investigations (IRS-CI) Los Angeles Field Office.  “Today’s unsealing of these charges demonstrates our collective efforts in tracing illicit funds internationally to enforce the laws and ensure public trust.”

Kazzaz, Newell and Hunt are also facing criminal forfeiture proceedings.

The cases were investigated by the DCIS, IRS-CI, SIGIR, the FBI, and the U.S. Army Criminal Investigations Division.   The cases are being prosecuted by Trial Attorney Catherine Votaw, on detail from SIGIR to the Fraud Section of the Justice Department’s Criminal Division, and Assistant U.S. Attorney David Estes of the Northern District of Alabama.

An indictment and information contain charges, and defendants are innocent until proven guilty.