Former Navy Civilian Employee And Former Executive Indicted In Bribery Scheme Involving Over $100 Million In Government Contracts

The U.S. Attorney’s Office, Southern District of California, released the below information on March 7^th:

SAN DIEGO – A former civilian employee of San Diego-based Naval Information Warfare Center and a former executive with a South Carolina defense contractor were charged in an indictment unsealed today with participating in a bribery scheme to trade expensive meals, jobs and a ticket to a premiere sporting event for help obtaining more than $100 million in government contracts.

According to the indictment, James Soriano, of Las Vegas, Nevada, worked for the Naval Information Warfare Center, which provided contract administration services for the Navy. From 2006 to 2019, Soriano was an engineer, project leader and certified “Contracting Officer Representative” with technological expertise to help manage Department of Defense contracts. Soriano was supposed to act as liaison between the government and the contractor, including keeping contractor bid, proposal and selection information confidential, and protecting the integrity of the acquisition process by maintaining fairness in the government’s treatment of all bidders.

According to the indictment, Soriano instead used his considerable influence to steer lucrative contracts to Russell Thurston of Mt. Pleasant, South Carolina, who was an executive vice president of a company vying for defense contracts with locations in Arlington, Virginia, and Charleston, South Carolina. The company provided technical and consulting services in the information technology field.

The indictment said Thurston, and others working under him, gave Soriano various things of value including jobs for a family member and friends, free meals at various restaurants, as well as a ticket to the 2018 MLB All Star Game held at Nationals Park in Washington, D.C. One of the friends who was given a job at Soriano’s request gave Soriano half her salary every month—approximately $2,000 per month—in cash. The indictment indicates the friend was not actually performing the duties for which she was being paid.

In return, Soriano took official action to benefit the company, including allowing Thurston and other employees to draft procurement documents for various contracting efforts, even where the company was competing for the contract against other bidders. As a result of Soriano’s efforts, the company won a task order with a more than $300 million ceiling. Soriano then approved numerous projects on this task order, ultimately causing the government to obligate more than $100 million to the company. 

To conceal their activities, Thurston, Soriano, and other employees at the company would intentionally delete document properties on procurement documents drafted by  employees. Soriano also failed to disclose the gifts on his yearly required OGE Form 450. 

“This indictment reveals callous greed at the cost of taxpayer dollars,” said U.S. Attorney Tara McGrath. “This office will vigorously investigate and prosecute fraud that threatens public trust in our institutions.”

“The indictment of James Soriano and Russell Thurston should be a deterrent for individuals and companies contemplating or attempting to misuse positions of public trust in order to enrich themselves financially or ensure future lucrative contracts,” said Bryan D. Denny, Special Agent-in-Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Western Field Office.  “The alleged actions subvert the integrity of the government’s acquisition process, waste taxpayers’ money, and ultimately degrade the readiness of America’s warfighters.”

“The DoD contracting process ensures our taxpayer dollars are spent appropriately to equip our warfighters with the tools necessary to fight and win in an ever-increasingly complex environment.  Attempts to undermine that process ultimately put our warfighters at risk,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation. “This most recent indictment against Mr. Soriano and Mr. Thurston is demonstrative of IRS Criminal Investigation’s relentless commitment to supporting national security through partnering on corruption investigations while continuing to pursue those who intentionally evade paying their fair share in taxes, whether their income is legally or illegally obtained.”

“Using a position of public trust as a means to fraudulently grant access to federal programs for personal gain will not be tolerated,” said SBA OIG’s Western Region Special Agent in Charge Weston King. “Our Office will remain relentless in the pursuit of fraudsters who seek to exploit SBA’s vital economic programs. I want to thank the U.S. Attorney’s Office and our law enforcement partners for their dedication and commitment to seeing justice served.”

Soriano is also charged with three counts of filing false tax returns as result of failing to declare the cash that he was receiving from his friend as income.

DEFENDANTS                                 Case Number 24cr0341-TWR

James Soriano                                     Age: 63                                   Las Vegas, NV

Russell Thurston                                 Age: 51                                   Mt. Pleasant, SC

SUMMARY OF CHARGES

Conspiracy to Commit Bribery - Title 18, U.S.C., Section 371

Maximum penalty: Five years in prison; $250,000 fine

Bribery – Title 18, U.S.C., Section 201

Maximum penalty: Fifteen years in prison; $250,000 fine for an individual or $500,000 for an organization, or three times the monetary equivalent of the thing of value, whichever is greater.

Fraud and False Statement in Tax Return – Title 26, U.S.C., Section 7206(1)

Maximum penalty: Three years in prison; $100,000 fine

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Naval Criminal Investigative Service

Small Business Administration – Office of Inspector General

IRS Criminal Investigation

Department of Health and Human Services – Office of Inspector General

*The charges and allegations contained in an indictment or complaint are merely accusations, and the defendants are considered innocent unless and until proven guilty.

If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, please contact the DoD Hotline at 800-424-9098.