Retired U.S. Navy Admiral Found Guilty In Bribery Scheme

The U.S. Justice Department released the information below on May 19^th:

WASHINGTON – Admiral Robert Burke (USN-Ret.), 62, of Coconut Creek, Florida, was found guilty of bribery today in connection with accepting future employment at a government vendor in exchange for awarding that company a government contract. 

Following a five-day trial, a federal jury found Burke guilty of conspiracy to commit bribery, bribery, performing acts affecting a personal financial interest, and concealing material facts from the United States. U.S. District Court Judge Trevor N. McFadden scheduled sentencing for August 22, 2025.

The verdict was announced by U.S. Attorney Jeanine Ferris Pirro, Matthew R. Galeotti Head of the Justice Department’s Criminal Division, Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office, Assistant Director in Charge Steven J. Jensen of the FBI Washington Field Office, and Special Agent in Charge Stanley Newell of the Department of Defense Office of Inspector General’s (DoD OIG) Defense Criminal Investigative Service (DCIS) Transnational Field Office. 

“When you abuse your position and betray the public trust to line your own pockets, it undermines the confidence in the government you represent,” said U.S. Attorney Pirro. “Our office, with our law enforcement partners, will root out corruption – be it bribes or illegal contracts – and hold accountable the perpetrators, no matter what title or rank they hold.”

According to court documents and as the evidence proved at trial, from 2020 to 2022, Burke was a four-star Admiral who oversaw U.S. naval operations in Europe, Russia, and most of Africa, and commanded thousands of civilian and military personnel. The two co-defendants Kim and Messenger were the co-CEOs of a company (Company A) and provided a workforce training pilot program to a small component of the Navy from August 2018 through July 2019. The Navy terminated a contract with Company A in late 2019 and directed Company A not to contact Burke. 

Despite the Navy’s instructions, the co-defendants met with Burke in Washington, D.C., in July 2021, to reestablish Company A’s business relationship with the Navy. At the meeting, the charged defendants agreed that Burke would use his position as a Navy Admiral to steer a contract to Company A in exchange for future employment at the company. They further agreed that Burke would use his official position to influence other Navy officers to award another contract to Company A to train a large portion of the Navy with a value one of the co-defendants allegedly estimated to be “triple digit millions.” 

In December 2021, Burke ordered his staff to award a $355,000 contract to Company A to train personnel under Burke’s command in Italy and Spain. Company A performed the training in January 2022. Thereafter, Burke promoted Company A in a failed effort to convince another senior Navy Admiral to award another contract to Company A. To conceal the scheme, Burke made several false and misleading statements to the Navy, including by falsely implying that Company A’s employment discussions with Burke only began months after the contract was awarded and omitting the truth on his required government ethics disclosure forms. 

In October 2022, Burke began working at Company A at a yearly starting salary of $500,000 and a grant of 100,000 stock options. 

This case was investigated by the Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the FBI’s Washington Field Office. It is being prosecuted by Assistant U.S. Attorney Rebecca G. Ross for the District of Columbia and Trial Attorneys Trevor Wilmot and Kathryn E. Fifield of the Criminal Division’s Public Integrity Section. It was investigated and indicted by Assistant U.S. Attorney Joshua Rothstein.

Lockheed Martin Corporation Agrees To Settle False Claims Act Allegations Of Defective Pricing

The U.S. Justice Department released the below information:

Lockheed Martin Corporation (LMC) has agreed to pay $29.74 million to resolve False Claims Act allegations of defective pricing on contracts for F-35 military aircraft. This payment is in addition to $11.3 million that LMC previously paid to the Department of Defense (DOD) for the same undisclosed cost and pricing data on some of the same contracts. LMC, headquartered in Bethesda, Maryland, is one of the world’s largest defense contractors.

According to court documents, between 2013 and 2015, LMC inflated pricing proposals it submitted to obtain contracts for the F-35 by failing to provide to DOD’s F-35 Joint Program Office (JPO) accurate, complete, and current cost and pricing data during the negotiations leading to the award of five contracts for the production or sustainment of the F-35. The United States alleged that LMC had knowledge of suppliers’ cost or pricing data that it did not disclose to the JPO in violation of the Truth in Negotiations Act (TINA). Congress enacted TINA in 1962 to help level the playing field in sole source contracts — where there is no price competition — by making sure that government negotiators have access to the cost or pricing data that the offeror used when developing its proposal. The United States alleged that had LMC provided accurate, complete, and current cost and pricing data, JPO would have awarded the contracts in lower amounts.

“Those who do business with the government must do so fairly and honestly,” said Acting Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division. “We will pursue contractors that knowingly misuse taxpayer funds.”

“The United States relies on contractors such as Lockheed Martin to provide accurate, complete, and current information, including pricing data, when negotiating contracts with the government,” said Acting U.S. Attorney Abe McGlothin, Jr, for the Eastern District of Texas. “If a contractor fails to do so, and that failure affects the value of its contract with the government, the Eastern District of Texas will take steps to ensure that the contractor is held accountable.”

“The F-35 program is at the heart of our nation’s defense,” said Air Force Lt. Gen. Mike Schmidt, Director and Program Executive Officer, F-35 Joint Program Office. “The F-35 Joint Program Office will continue to insist on integrity and honesty in all business transactions. We demand 100% accountability for every dollar spent on this program on behalf of U.S. taxpayers and international customers and taxpayers.”

“The Department of Defense Office of Inspector General’s Defense Criminal Investigative Service (DCIS) will methodically pursue all alleged violations of the False Claims Act and Truth in Negotiations Act,” said Principal Deputy Director James R. Ives of DCIS. “Today’s outcome reflects the unwavering commitment of DCIS and our investigative partners to hold accountable those who bilk the American taxpayer by perpetrating fraud against the DOD.”

“Overinflation of production and sustainment costs for an aircraft critical to our national defense undermines operational readiness and erodes the trust placed in the Department of Defense by the American people,” said Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office. “NCIS and our investigative partners remain steadfast in our commitment to investigating entities that compromise the integrity of government contracts.”

The settlement derives from allegations originally brought in a lawsuit filed in the Eastern District of Texas by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties, known as relators, to bring suit on behalf of the government and to share in any recovery. The qui tam case is captioned U.S. ex rel. Patrick Girard v. Lockheed Martin Corp., No. 4:17-CV-147 (EDTX). The relator’s share of the settlement has not yet been determined.

This settlement was the result of a coordinated effort between the Civil Division, Commercial Litigation Branch, Fraud Section of the Department of Justice, and the U.S. Attorney’s Office for the Eastern District of Texas with assistance from JPO, DCIS, NCIS, and the Defense Contract Audit Agency.

Trial Attorney Arnold M. Auerhan of the Justice Department’s Civil Division and Assistant U.S. Attorney James Gillingham for the Eastern District of Texas handled the matter.

The claims resolved by the settlement are allegations only, and there has been no determination of liability 

U.S. Navy Reserve Officer Sentenced For Bribery Scheme Involving Department Of State’s Approval Process For Special Immigrant Visas

 The U.S. Justice Department released the below information yesterday:

A U.S. Navy Reserve Commander from Florida was sentenced today to 30 months in prison for his role in a years-long bribery scheme involving Special Immigrant Visas (SIVs) for Afghan nationals.

According to court documents and evidence submitted at trial, Jeromy Pittmann, 53, of Pensacola, accepted bribe payments from Afghan nationals in exchange for drafting, submitting, and verifying fraudulent letters of recommendation for Afghan nationals who applied for SIVs with the U.S. Department of State. Since 2009, Congress has authorized the State Department to offer a limited number of SIVs to enter the United States for Afghan nationals who were employed as translators for U.S. military personnel. Pittmann signed over 20 letters in which he fraudulently represented that he personally knew and had supervised the Afghan national visa applicants while they worked as translators in support of the U.S. military and NATO; that the applicants’ lives were in jeopardy because the Taliban considered them to be traitors; and that, based on his personal knowledge of the applicants, he believed they did not pose any threat to the national security of the United States. In truth, Pittmann did not know the applicants and had no basis for recommending them for SIVs. In exchange for the fraudulent letters, Pittmann received several thousands of dollars in bribes. To avoid detection, Pittmann received the bribe money through an intermediary and created false invoices purporting to show that Pittmann was receiving the money for legitimate work unrelated to his military service.

On July 12, Pittmann was convicted by a jury in the District of New Hampshire after a four-day trial of conspiracy to commit bribery, bribery, making a materially false writing, and conspiring to commit money laundering.

“By protecting Afghan nationals who risk their personal safety to help the U.S. government, the SIV program is essential for the security of U.S. military and diplomatic personnel in Afghanistan,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Jeromy Pittmann, however, used his position of authority over the program to benefit foreign nationals who paid him bribes, falsely asserting that they had served the United States. Today’s sentence demonstrates that the Justice Department has zero tolerance for those who place their self-interest ahead of our national security.”

“This case shows how someone betrayed his sacred oath of office to commit crimes for personal gain, with no regard for how his actions could threaten U.S. homeland security and harm Afghans, who risked their lives to help the United States,” said Inspector General John F. Sopko of the Special Inspector General for Afghanistan Reconstruction (SIGAR). “It also shows how a U.S. Government investigation — from initial tip to prosecution to conviction — can hold individuals accountable for their crimes. I’m proud of SIGAR special agents and our investigative partners who brought Pittmann to justice, and I hope their hard work will deter others from pursuing similar acts.”

“Pittmann’s participation in this bribery scheme not only jeopardized the integrity of the SIV program, which protects our allies, but also introduced significant security risks to our nation,” said Special Agent in Charge Greg Gross of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Office. “NCIS and our partners will continue to hold accountable those who exploit government processes for personal gain, ensuring that the safety of the public and our warfighters is preserved.”

“Pittmann deliberately chose self-enrichment over service when he violated federal law in his lengthy bribery scheme. He also compromised the integrity of the Afghan SIV system which is intended for those who faithfully performed activities while working for, or on behalf of, the U.S. government in Afghanistan,” said Inspector General Robert P. Storch of the Department of Defense. “The Defense Criminal Investigative Service (DCIS), in collaboration with its law enforcement partners, is resolved to help bring to justice those who abuse their public office for personal gain.”

“The Diplomatic Security Service (DSS) is firmly committed to protecting the integrity of all U.S. visas and travel documents,” said Deputy Assistant Director Greg Batman of DSS. “This case is the result of a strong partnership among federal law enforcement agencies and DSS’ global network of special agents working together to stop visa and passport crimes, and to stop criminals from earning illegal income by exploiting U.S. visas, passports, and foreign nationals.”

SIGAR, NCIS, DCIS, and DSS investigated the case.

Trial Attorneys Matt Kahn and Theodore M. Kneller of the Criminal Division’s Fraud Section prosecuted the case.

U.S. Navy Shipbuilder Pleads Guilty To Financial Accounting Fraud Scheme And Obstructing a Defense Department Audit

The Justice Department released the below:

Austal USA LLC (Austal USA), a Mobile, Alabama-based shipbuilder that constructs vessels for the U.S. Navy and U.S. Coast Guard, pleaded guilty today and has agreed to pay $24 million to resolve an investigation by the Justice Department related to an accounting fraud scheme and efforts to obstruct the Defense Contract Audit Agency (DCAA) during a financial capability audit. Austal USA is a wholly owned subsidiary of Austal Limited, an Australian company that is publicly traded on the Australian Securities Exchange and was traded over-the-counter in the United States via American Depositary Receipts.

The Justice Department’s criminal resolution was coordinated with the U.S. Securities and Exchange Commission (SEC). Separately, Austal USA also entered into a False Claims Act settlement with the department’s Civil Division to resolve claims that it knowingly provided non-compliant parts to the U.S. Navy.  

“Austal USA, a shipbuilder for the U.S. military, engaged in a years-long scheme to illegally inflate its profits on ships the company was building for the U.S. Navy, reporting false financial results to investors, lenders, and its auditors,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “The investing public, the U.S. Navy, and the Defense Contract Audit Agency relied on Austal USA to tell the truth about its financial condition and its performance on U.S. Navy contracts. Today’s guilty plea underscores the Department of Justice’s commitment to holding U.S. government contractors accountable for their criminal misconduct and ensuring that they engage honestly with the U.S. government.”

“Maintaining our national security and military infrastructure cannot come at the cost of the integrity of our contracting processes,” said U.S. Attorney Sean P. Costello for the Southern District of Alabama. “Today’s actions ensure accountability and promote the rule of law in this critical arena.”

According to court documents, from at least in or around 2013 through at least in or around July 2016, Austal USA and its co-conspirators conspired to mislead Austal Limited’s shareholders, independent financial statement auditors and the investing public about Austal USA’s financial condition. Specifically, Austal USA artificially suppressed an accounting metric known as an “estimate at completion” (EAC) in relation to multiple Littoral Combat Ships that Austal USA was building for the U.S. Navy. Suppressing the EACs had the effect of falsely overstating Austal USA’s profitability on those shipbuilding efforts and Austal Limited’s earnings reported in its public financial statements. Austal USA and its co-conspirators manipulated the EAC figures in part by using so-called “program challenges,” which were false plug numbers to hide growing shipbuilding costs that should have been incorporated into the company’s financial statements. Austal USA did this to maintain and increase the share price of Austal Limited’s stock. When the higher costs were eventually disclosed to the market, Austal Limited wrote down over $100 million, and the stock price was significantly negatively impacted. 

“Defense contractors that engage in fraud erode the public’s trust in our Armed Forces,” said Director Omar Lopez of the Naval Criminal Investigative Service (NCIS). “NCIS and our investigative partners are determined to hold those accountable whose actions erode that trust. We are committed to rooting out economic crime that negatively impacts the readiness of the Department of the Navy.”

“This case is a direct result of the superb dedication of the investigative and prosecution teams,” said Director Kelly P. Mayo of the Department of Defense (DoD) Office of Inspector General, Defense Criminal Investigative Service (DCIS). “These committed professionals’ efforts send a clear message to DoD contractors of our unwavering resolve to investigate and prosecute fraud, corruption, and efforts to circumvent compliance measures that reduce our combat effectiveness.”

The department reached this resolution with Austal USA based on a number of factors, including, among others, the nature and seriousness of the offense and the pervasiveness of the misconduct at the most senior levels of Austal USA. Austal USA received credit for affirmative acceptance of responsibility and limited credit for its cooperation with the department’s investigation, which included facilitating interviews with current and former employees, enabling the department to promptly produce records in a related court case, and making a timely disclosure of all relevant facts and documents pertaining to an unrelated matter. However, Austal USA’s cooperation was limited in a number of respects, including: Austal USA did not provide to the department any relevant facts relating to this conduct until two years after learning of the department’s investigation; Austal USA produced certain relevant documents after significant delay; Austal USA was delayed in responding to certain requests from the government, and often required follow-up requests from the government before responding; and Austal USA did not at all times demonstrate a commitment to full and timely cooperation.

Austal USA also engaged in remedial measures, but those remedial measures were untimely and incomplete, including that Austal USA did not begin disciplining employees involved in the misconduct until more than two years after Austal USA learned of the government’s investigation and did not undertake any independent steps to make restitution to the victims of its securities fraud scheme. Austal USA has begun remediating weaknesses in internal controls that allowed the company’s misconduct to occur, but Austal USA’s remediation of its controls is still ongoing and requires additional improvements and testing.

Under the terms of the plea agreement, which still must be accepted by the court, Austal USA pleaded guilty to one count of securities fraud and one count of obstruction of a federal audit. Based on application of the U.S. Sentencing Guidelines, the department determined that the appropriate criminal penalty is $73,572,680.10. However, due to Austal USA’s demonstrated inability to pay the criminal fine, Austal USA and the department agreed, consistent with the department’s inability to pay guidance, that Austal USA would pay a criminal fine of $24 million and restitution of up to $24 million for losses to Austal Limited shareholders. The department has agreed to credit all of the criminal fine and restitution against amounts Austal USA will pay to resolve an investigation by the SEC for related conduct. 

Austal USA has also agreed to retain an independent compliance monitor for a period of three years, and Austal USA and Austal Limited have agreed to continue to implement a compliance and ethics program at Austal USA designed to prevent and detect fraudulent conduct throughout its operations. Austal USA and Austal Limited have also agreed to continue to cooperate with the Justice Department in any ongoing or future criminal investigations relating to this conduct. In addition, Austal USA will serve three years of probation.

A sentencing hearing is scheduled for Nov. 25.

Three former Austal USA executives, Craig Perciavalle, Williams Adams, and Joseph Runkel, were indicted on March 30, 2023 on one count of conspiracy to commit wire fraud and wire fraud affecting a financial institution, five counts of wire fraud, and two counts of wire fraud affecting a financial institution.  They await trial. 

NCIS and DCIS are investigating the case. The Justice Department’s Office of International Affairs and authorities in Australia, as well as DCAA’s Office of Investigative Support, provided valuable assistance in the matter.

Assistant Chief Kyle Hankey and Trial Attorneys Laura Connelly and Spencer Ryan of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Christopher Bodnar for the Southern District of Alabama are prosecuting the case.

If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov. Victims can find case updates and additional information at www.justice.gov/criminal/criminal-vns/case/austal-usa-llc.

Under the terms of the plea agreement, the SEC would handle the distribution of funds to harmed investors. Investors harmed as a result of the misconduct of defendant should watch the SEC’s Harmed Investors pagefor further developments regarding the SEC’s distribution of funds to harmed investors.

An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Defense Contractor Pleads Guilty To Fraud, Money Laundering And Unlawful Export Of Military Data

 The U.S. Justice Department released the below information:

Yuksel Senbol, 36, of Orlando, pleaded guilty to 25 felony counts in Florida federal court, including conspiracy to defraud the United States, conspiracy to commit wire fraud, eight counts of wire fraud, conspiracy to commit money laundering, seven counts of money laundering, conspiracy to violate the Export Control Reform Act (ECRA), four counts of violating the ECRA, and one count of violating the Arms Export Control Act.

According to court documents, beginning in approximately April 2019, Senbol operated a front company in the Middle District of Florida called Mason Engineering Parts LLC. She used this front company to assist her co-conspirators, Mehmet Ozcan and Onur Simsek, to fraudulently procure contracts to supply critical military components to the Department of Defense. These components were intended for use in the U.S. Navy Nimitz and Ford Class Aircraft Carriers, U.S. Navy Submarines, U.S. Marine Corps Armored Vehicles, and U.S. Army M-60 Series Tank and Abrahams Battle Tanks, among other weapons systems.

To fraudulently procure the government contracts, Senbol and her co-conspirators falsely represented to the U.S. government and to U.S. military contractors that Mason Engineering Parts LLC was a vetted and qualified manufacturer of military components, when in fact, the parts were being manufactured by Ozcan and Simsek in Turkey. And, as Senbol knew, Simsek’s involvement had to be concealed from the U.S. government because he had been debarred from contracting with the U.S. government after being convicted of a nearly identical scheme in the Southern District of Florida.

In order to enable Ozcan and Simsek to manufacture the components in Turkey, Senbol assisted them in obtaining sensitive, export-controlled drawings of critical U.S. military technology. Using software that allowed Ozcan to remotely control her computer – and thus evade security restrictions that limited access to these sensitive military drawings to computers within the United States – Senbol knowingly facilitated the illegal export of these drawings. She did so despite having executed numerous agreements promising to safeguard the drawings from unlawful access or export, and despite the clear warnings on the face of each drawing that it could not be exported without obtaining a license.

Once Ozcan and Simsek manufactured the components in Turkey, they shipped them to Senbol, who repackaged them – making sure to remove any reference to their Turkish origin. The conspirators then lied about the origin of the parts to the U.S. government and a U.S. government contractor to receive payment for the parts. Senbol then laundered hundreds of thousands of dollars in criminal proceeds back to Turkey through international wire transfers.

This scheme continued until uncovered and disrupted by federal investigators. Parts supplied by Senbol were tested by the U.S. military and were determined not to conform with product specifications. Many of the components supplied to the U.S. military by Senbol were “critical application items,” meaning that failure of these components would have potentially rendered the end system inoperable.

Senbol faces up to 10 years in prison for the conspiracy to defraud the United States offense and for each count of money laundering. She faces up to 20 years in prison for each count of conspiracy to commit wire fraud, wire fraud, conspiracy to commit money laundering, conspiracy to violate the ECRA, violating the ECRA and violating the Arms Export Control Act. Sentencing is scheduled for Aug. 6. Alleged co-conspirators Mehmet Ozcan and Onur Simsek are fugitives.

This case was investigated by the FBI; General Services Administration, Office of Inspector General; Defense Criminal Investigative Service; Department of Commerce, Bureau of Industry and Security; Air Force Office of Special Investigations; Homeland Security Investigations; and Department of State, Directorate of Defense Trade Controls.

Assistant U.S. Attorneys Daniel J. Marcet and Lindsey Schmidt for the Middle District of Florida, and Trial Attorney Stephen Marzen of the National Security Division’s Counterintelligence and Export Control Section are prosecuting the case.

Man Pleads Guilty To Selling $3.5M In Counterfeit And Deficient Electronics For Use In Military Systems

The U.S. Justice Department released the below information:

A California man pleaded guilty yesterday to a scheme to defraud the Department of Defense’s (DoD) Defense Logistics Agency (DLA) by selling over $3.5 million worth of fan assemblies to the DLA that were either counterfeit or misrepresented to be new.

“The defendant sold counterfeit and deficient fan assemblies for use in military systems to increase his profit,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “Criminals who cheat the U.S. military by selling deficient or counterfeit goods put our national security at risk. This case demonstrates the Justice Department’s commitment to protecting the military supply chain and Americans’ security.”

“Through his company, Kim delivered counterfeit products to our armed services and tried to pass off non-conforming products with fake invoices,” said U.S. Attorney Ismail Ramsey for the Northern District of California. “Swindling our military is a sure way to find oneself in jail. This office is always on the lookout for fraudsters and will prosecute anyone caught cheating our military by providing products that endanger our service people or compromise our readiness.”

According to court documents, Steve H.S. Kim, 63, of Alameda County, controlled Company A, which sold fan assemblies to the DLA that were either counterfeit or were used or surplus fan assemblies that he claimed were new. To trick the DLA into accepting the fan assemblies, Kim created counterfeit labels — some of which used Company B’s registered trademarks — that he attached to the fan assemblies he sold to the DLA. When the DLA questioned Kim about the origin of the fan assemblies, Kim concealed his scheme by giving the DLA fake tracing documents that he created and often signed using a false identity. Some of these counterfeit fans were installed or intended to be installed with electrical components on a nuclear submarine, a laser system on an aircraft, and a surface-to-air missile system.

“The Defense Criminal Investigative Service (DCIS), the law enforcement arm of the DoD Office of Inspector General, is fully committed to protecting the integrity of the DoD supply chain,” said Special Agent in Charge Bryan D. Denny of the DCIS Western Field Office. “Supplying counterfeit products to the DoD endangers the mission and betrays the public’s trust. This investigation demonstrates DCIS’ ongoing commitment to working with its law enforcement partners to hold individuals who defraud the DoD accountable.”

“The Naval Criminal Investigative Service (NCIS) and our law enforcement partners work diligently to thwart attempts to infiltrate the DoD supply chain with potentially damaging counterfeit product,” said Special Agent in Charge Greg Gross of the NCIS Economic Crimes Field Office. “This case highlights the efforts of the investigative team to expeditiously shut down such a scheme and prevent possible grievous harm to our ability to conduct effective combat operations.”

“This case reflects Homeland Security Investigation’s (HSI) core mission set of investigating national security threats as well as protecting global trade and government supply chains,” said Special Agent in Charge Tatum King of HSI San Francisco. “In this case, the serious risks posed to mission readiness were especially alarming. HSI appreciates the joint efforts of NCIS, DCIS, and the Army Criminal Investigation Division (Army CID), together with the Justice Department, in bringing the violator to justice.”

“The result of this joint investigation underscores the importance of our federal law enforcement partnerships and shows that by working together we can identify, prosecute, and dismantle businesses that supply the U.S. military with fraudulent parts and services,” said Special Agent in Charge Keith K. Kelly of the Army CID Fraud Field Office. “Our Army communities and the public can rest assured that we are committed to pursuing anyone that would defraud the U.S. government for their own personal gain and put combat readiness at risk.”

Kim pleaded guilty to one count of wire fraud and one count of trafficking in counterfeit goods. He is scheduled to be sentenced on July 17 and faces a maximum penalty of 20 years in prison on the wire fraud count and 10 years in prison on the trafficking in counterfeit goods count. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

DCIS, NCIS, HSI, and Army CID are investigating the case.

Assistant Chief Kyle C. Hankey and Trial Attorneys Louis Manzo and David D. Hamstra of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Katherine Lloyd-Lovett for the Northern District of California are prosecuting the case. Assistant Deputy Chief Adrienne Rose and Senior Counsels Jason Gull and Matthew A. Lamberti of the Criminal Division’s Computer Crime and Intellectual Property Section provided substantial assistance with the investigation. 

GE Aerospace Agrees To Pay $9.4 Million To Resolve Allegations Of False Claims Act Violations

The U.S. Attorney’s Office, District of Massachusetts released the below link:

BOSTON – GE Aerospace, an operating division of the General Electric Company, has agreed to pay $9,413,024 to resolve allegations that its Lynn, Mass. manufacturing plant (GEA Lynn) sold parts to the United States Army and the United States Navy that were either not properly inspected or were nonconforming, in violation of the False Claims Act. 

Headquartered in Evendale, Ohio, GE Aerospace manufactures aircraft engines that it sells to U.S. military customers. Engines that GEA Lynn sells to U.S. military customers must meet the requirements established by engineering drawings. To meet those requirements, GEA Lynn further requires employees to follow manufacturing planning instructions including parts inspections, among other requirements. GE Aerospace admits that, at times from July 24, 2012 to Dec. 31, 2019, GEA Lynn did not conduct required parts inspections and sold engines containing parts that did not meet certain required specifications to U.S. miliary customers. Specifically: 

1.     Between July 24, 2014 and Aug. 11, 2017, GEA Lynn did not consistently use functional gauges to inspect features on certain parts; 

2.     Between July 24, 2014 and Sept. 2018, GEA Lynn omitted at least two inspections of curvic features on certain part numbers; and

3.     Between July 24, 2014 and Dec. 31, 2019, GEA Lynn sold engines to the U.S Army and the U.S. Navy that contained unallowable metal fragments. 

“The Defense Criminal Investigative Service (DCIS), the law enforcement arm of the U.S. Department of Defense (DoD) Office of Inspector General, is fully committed to protecting the DoD procurement process,” said Patrick J. Hegarty, Special Agent in Charge of the Department of Defense, Office of Inspector General, Defense Criminal Investigative Service, Northeast Field Office. “Failing to inspect parts as required by contract specifications compromises military systems and potentially endangers the lives of U.S. service members. We will continue to work with our law enforcement partners and the Department of Justice to investigate DoD contractors that submit false claims to DoD agencies and threaten the DoD supply chain.”

“The provision of non-conforming parts for Department of Defense aircraft engines could pose a substantial threat to warfighter safety and readiness,” said Greg Gross, Special Agent in Charge Naval Criminal Investigative Service (NCIS), Economic Crimes Field Office. “We thank our law enforcement partners and the Department of Justice for their significant efforts on this complex investigation. NCIS remains committed to ensuring the integrity of the DoD procurement process.”

“The results of this investigation shows that our agents, and those of our partner law enforcement agencies, are relentless in their pursuit of those who attempt to defraud the U.S. Government and put our Warfighters lives at risk,” said Supervisory Special Agent John Scarlett, Department of the Army Criminal Investigation Division, Major Procurement Fraud Field Office, Northeast Fraud Resident Agency. “This case should send a clear message to all who do business with the Department of the Army that we are committed to identifying and stopping contractor fraud.”

Acting U.S. Attorney Levy, DCIS SAC Hegarty, NCIS SAC Gross, and DCIS SSA Scarlett Northeast Fraud Resident Agency made the announcement today. Assistant U.S. Attorneys Lindsey Ross and Alexandra Brazier of the Affirmative Civil Enforcement Unit handled the matter. 

Military Contractors Indicted For $7 Million Procurement Fraud Scheme

 The U.S. Justice Department released the below information:

A federal grand jury in the Northern District of Georgia returned an indictment charging military contractors with an alleged fraud scheme involving government contracts totaling over $7 million.

The three-count indictment charges Envistacom LLC, its President Alan Carson and a vice president Valerie Hayes, and the owner of another company, Philip Flores, each with one count of conspiracy to defraud the United States and two counts of major fraud.

“Collusion and fraud undermine competition in the procurement process to the detriment of U.S. taxpayers,” said Assistant Attorney General Jonathan Kanter of the Justice Department’s Antitrust Division. “Investigating and prosecuting criminal activity remains a top priority for the Department of Justice and all members of the Procurement Collusion Strike Force.”

“The United States relies upon its contractors to be honest and forthright in their dealings,” said U.S. Attorney Ryan K. Buchanan for the Northern District of Georgia. “When they allegedly provide false information to obtain contracts, they harm the American taxpayer and the integrity of the system. We will diligently work to bring such companies and their executives to justice.”

“The indictment of these individuals demonstrates the resolve and dedication of the Defense Criminal Investigative Service and our investigative partners in protecting the integrity of the Department of Defense contracting system,” said Special Agent in Charge Cynthia A. Bruce, Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “Contractors who circumvent the contracting process for their own personal gain will be thoroughly investigated and held accountable for their fraudulent actions.”

“Such alleged activity by government contractors who provide services to the Army will not be tolerated,” said Special Agent in Charge L. Scott Moreland of the U.S. Army Criminal Investigation Division’s (Army CID) Major Procurement Fraud Field Office. “We will continue to investigate allegations of this nature and do everything in our power to see that persons responsible are held accountable and brought to justice.”

According to the indictment, from at least September 2014 through at least November 2016, the defendants and others conspired by preparing and procuring purported “competitive quotes” from other companies, which were sham quotes that were intentionally higher than the proposal prices and/or price quotes from Envistacom and Flores’ company to ensure the sole-source awards. The conspirators also concealed that the defendants prepared the independent government cost estimates and other procurement documents for the award of these contracts and made false statements, representations and material omissions to federal government contracting officials regarding these estimates being legitimate independent cost estimates and the sham quotes being “competitive.”

The maximum penalty for conspiracy to defraud the United States is five years in prison and a fine of $250,000. The maximum penalty for major fraud is 10 years in prison and a fine of $1 million, or, if the gross loss to the government or the gross gain to a defendant is $500,000 or greater, a fine of $5 million. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other relevant factors.

The charges are the result of a federal investigation conducted by the Antitrust Division’s Washington Criminal II Section, the U.S. Attorney’s Office for the Northern District of Georgia, Army CID and DCIS.

Anyone with information in connection with this investigation should contact the Antitrust Division’s Complaint Center at 888-647-3258, or visit http://www.justice.gov/atr/report-violations.

In November 2019, the Department of Justice created the Procurement Collusion Strike Force (PCSF), a joint law enforcement effort to combat antitrust crimes and related fraudulent schemes that impact government procurement, grant, and program funding at all levels of government – federal, state and local. To learn more about the PCSF, or to report information on market allocation, price fixing, bid rigging and other anticompetitive conduct related to defense-related spending, go to https://www.justice.gov/procurement-collusion-strike-force.

Lancaster, PA Company Agrees To Pay $820,000 For Improper Billing Of Defense Intelligence Agency

PHILADELPHIA, PA – United States Attorney Jennifer Arbittier Williams announced that Reveal Global Consulting, LLC (“Reveal”) has agreed to pay $820,000 to the federal government to resolve allegations that it violated the False Claims Act by improperly billing time and expenses in its performance of a contract with the Defense Intelligence Agency (“DIA”). 

In 2017, Reveal entered into a Spearheading CIO Applied Research and Leading Edge Technologies (“SCARLET”) contract with DIA. The contract was a time-and-materials contract under which Reveal could bill the United States only for time it actually expended and materials it required to fulfill its contractual obligations. Instead, Reveal allegedly billed the DIA for one twelfth of the total contract even for months in which less than one twelfth of the total required effort was devoted to the contract; devoted fewer than the promised employees for multiple months; submitted inflated and misstated bills for work by subcontractors; and invoiced the DIA for work supposedly performed by Reveal employees who had already left the company. Throughout the contract, Reveal allegedly failed to establish and maintain an adequate, effective timekeeping system.

“There is no excuse for invoicing the United States for work that was not done,” said U.S. Attorney Williams. “Companies that work for the United States have a moral and legal obligation to ensure that the United States receives the goods and services for which it is paying, and the United States Attorney’s Office is ready to investigate and punish contractors who flout this fundamental rule.”

“This case is a result of the stalwart, dedicated and collaborative work of investigators, DIA Office of the Inspector General (OIG), DOD OIG, Defense Criminal Investigations Services, the DCAA, and DOJ. The Office of the Inspector General, DIA, will continue to root out fraud, waste, and abuse in DIA processes while improving government funds stewardship from our civilian and contractor workforce,” said William Borden, Assistant Inspector General for Investigations, DIA.

“Investigating allegations of cost mischarging on Department of Defense (DoD) contracts is a top priority for the DoD Office of Inspector General's Defense Criminal Investigative Service (DCIS),” stated Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office. “The settlement agreement announced today is the result of a joint investigative effort with the Defense Intelligence Agency Office of the Inspector General and demonstrates the DCIS’ ongoing commitment to protect the integrity of DoD procurement.”

This investigation was conducted as part of the United States Attorney’s Office for the Eastern District of Pennsylvania’s Affirmative Civil Enforcement Strike Force with investigators from the Defense Intelligence Agency Office of Inspector General and DCIS, with assistance the Department of Commerce Office of Inspector General and Department of Health and Human Services Office of Inspector General. Assistant U.S. Attorney Paul W. Kaufman handled the investigation and settlement.

The claims resolved by the settlement are allegations only; there has been no determination of liability. 

Connecticut And New York Companies Agree To Pay Over $900,000 For Providing Chinese-Made Containers To Department of Defense

 The U.S. Attorney’s Office Eastern District of PA released the below information:

PHILADELPHIA, PA – United States Attorney Jennifer Arbittier Williams announced that SoNo International LLC (“SoNo”) and Ark Capital Equipment LLC (“Ark”) have agreed to jointly pay $904,000 to the federal government to resolve allegations that they violated the False Claims Act by supplying the Department of Defense with shipping containers made in China and/or made from Chinese steel.  The Department of Defense contracted for its agencies to purchase American-made materials or materials manufactured in specified allied countries, such as South Korea.  Instead, in one contract, SoNo and Ark allegedly had a third-party company change the identifying plates on 100 shipping containers made in China to make them appear to have been manufactured in South Korea.  On two other contracts, SoNo’s supplier used Chinese steel, and SoNo and Ark allegedly failed to detect the deception before providing the United States military those containers.

As part of the resolution with the United States, SoNo and Ark have entered into an administrative agreement with the Defense Logistics Agency establishing enhanced training and reporting requirements with respect to government procurement.  The third-party company that physically switched the plates has reached a separate agreement with the United States under which it will provide training to its employees to enhance their compliance with Customs rules and regulations and improve their awareness of Buy American and other issues.

“Americans have the right to know that their tax dollars are being spent to support American jobs and American policies,” said U.S. Attorney Williams. “When the Department of Defense purchased this material for our warfighters, SoNo agreed to acquire material from and support manufacturers in America or our allied nations. The United States Attorney’s Office is ready to investigate and punish contractors who do not follow these clear rules.”

“Protecting the integrity of the Department of Defense (DoD) procurement process and supply chain is a top priority for the DoD Office of Inspector General Defense Criminal Investigative Service (DCIS),” stated Special Agent in Charge Patrick J. Hegarty, DCIS Northeast Field Office.  “The DCIS will continue to work with its law enforcement partners and the USAO-EDPA to hold DoD contractors accountable to contract requirements and ensure that quality products and services are provided to the U.S. military.”

“AFOSI will continue to work with our law enforcement partners and the U.S. Attorney’s Office, Eastern District of Pennsylvania, to protect the integrity of the Federal procurement process and ensure wrongdoers are held accountable for their actions,” said Special Agent in Charge William W. Richards, Air Force Office of Special Investigations.

This investigation was conducted as part of the United States Attorney’s Office for the Eastern District of Pennsylvania’s Affirmative Civil Enforcement Strike Force with investigators from DCIS, the Army Criminal Investigation Division, and the Air Force Office of Special Investigations, with assistance from Homeland Security Investigations and the U.S. Customs and Border Protection’s Regulatory Audit and Agency Advisory Services. Assistant U.S. Attorney Paul W. Kaufman handled the investigation and settlement. 

The claims resolved by the settlement are allegations only; there has been no determination of liability.  

Former Metallurgist Lab Director Pleads Guilty To Major Fraud: Repeatedly Falsified Test Results On Strength Of Metal Used For Submarine Parts

 The U.S. Attorney’s Office Western District of Washington released the below information: 

Tacoma – The former Director of Metallurgy at Bradken Inc. pleaded guilty today in U.S. District Court in Tacoma to defrauding the United States by falsifying test results that measure the strength and toughness of steel used in U.S. Navy submarines, announced U.S. Attorney Nick Brown.  

Elaine Thomas, 67, of Auburn, Washington, pleaded guilty to major fraud on the United States.  She faces up to 10 years in prison and a $1 million fine when sentenced by U.S. District Judge Benjamin H. Settle on February 14, 2022.

According to records filed in the case, Bradken is the U.S. Navy’s leading supplier of cast high-yield steel for naval submarines.  Bradken’s Tacoma foundry produces castings that prime contractors use to fabricate submarine hulls.  The Navy requires that the steel meets certain standards for strength and toughness to ensure that it does not fail under certain circumstances, such as a collision.  For 30 years, the Tacoma foundry (which was acquired by Bradken in 2008), produced castings, many of which had failed lab tests and did not meet the Navy’s standards.  Elaine Thomas, as Director of Metallurgy, falsified test results to hide the fact that the steel had failed the tests.  Thomas falsified results for over 240 productions of steel, which represent a substantial percentage of the castings Bradken produced for the Navy. 

Court filings indicate there is no evidence that Bradken’s management was aware of the fraud until May 2017.  At that time, a lab employee discovered that test cards had been altered and that other discrepancies existed in Bradken’s records.  In June 2020, Bradken entered into a deferred prosecution agreement, accepting responsibility for the offense and agreeing to take remedial measures.  Bradken also entered into a civil settlement, paying $10,896,924 to resolve allegations that the foundry produced and sold substandard steel components for installation on U.S. Navy submarines.

The Navy has taken extensive steps to ensure the safe operation of the affected submarines.  Those measures will result in increased costs and maintenance as the substandard parts are monitored.  

The criminal case against Thomas, deferred prosecution agreement, and civil settlement with Bradken are the result of a coordinated effort among the U.S. Attorney’s Office for the Western District of Washington, the Civil Division’s Commercial Litigation Branch, the Department of Defense Office of Inspector General's Defense Criminal Investigative Service, Naval Criminal Investigative Service, and the Defense Contract Audit Agency. 

The criminal prosecution is being handled by Assistant United States Attorney Seth Wilkinson. 

Former Government Contractor Sentenced For Role In Bribery And Kickback Scheme

 The U.S. Justice Department released the below information: 

A former government contractor was sentenced today for his role in a bribery and kickback scheme where he paid bribes to secure U.S. Army contracts. 

David P. Burns, Acting Assistant Attorney General of the Justice Department’s Criminal Division; Kenji M. Price, U.S. Attorney of the District of Hawaii; Ray Park, Special Agent in Charge of the U.S. Army Criminal Investigation Command’s (Army-CID) Pacific Fraud Field Office; Bryan Denny, Special Agent in Charge of the U.S. Defense Criminal Investigative Service (DCIS); and Eli “Sam” Miranda, Special Agent in Charge of the FBI’s Honolulu Field Office made the announcement. 

John Winslett, 66, of Bristol, Rhode Island, was sentenced to 70 months in prison followed by three years of supervised release before Chief Judge J. Michael Seabright in the District of Hawaii. 

According to court documents and information presented in court, Winslett admitted that from 2011 to 2018, he paid over $100,000 worth of bribes to two U.S. Army contracting officials who worked at the Range at Schofield Barracks, in order to steer federal contracts worth at least $19 million to his employer, a government contractor. The bribes included cash, automobiles, and firearms. In return, the contracting officials used their positions to benefit Winslett’s employer in securing U.S. Army contracts. 

Winslett further admitted that he accepted $723,333.33 in kickbacks from a local subcontractor in exchange for Winslett assigning those contracts to that local subcontractor.

Army-CID, DCIS and the FBI investigated this case. 

Trial Attorney Laura Connelly and Principal Assistant Chief Justin Weitz of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Marc Wallenstein of the District of Hawaii are prosecuting the case.  

Former Senior U.S. Navy Employee Charged For Role In Bribery Conspiracy And Lying To Investigators

The U.S. Justice Department released the below information:

The former Director of Operations of the U.S. Navy’s Military Sealift Command Office in Busan, Republic of Korea (ROK) was charged in a complaint filed today in connection with his alleged participation in a bribery conspiracy and alleged lying to federal investigators.

Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, Special Agent in Charge David Bell of the Naval Criminal Investigative Service’s (NCIS) Far East Field Office, and Special Agent in Charge Stanley A. Newell of the Defense Criminal Investigative Service’s (DCIS) Transnational Operations Field Office made the announcement.

Xavier Fernando Monroy, 62, a U.S. citizen, was charged in a complaint filed in the District of Columbia with one count of conspiracy to commit bribery, one count of bribery, one count of false statements, and one count of obstruction of justice. 

The affidavit in support of the complaint alleges that Monroy engaged in a conspiracy to commit bribery with Sung Yol “David” Kim, the owner of DK Marine, a ROK-based company that provided ship husbanding services to the U.S. Navy, and James Russell Driver III, a former civilian U.S. Navy cargo ship captain, in connection with the provision of husbanding services for Driver’s ship during a December 2013 port visit in Chinhae, ROK.  In order to steer the ship’s husbanding services business to DK Marine, Driver sought, and Kim conveyed, Monroy’s directions on how to circumvent appropriate Navy procedures.

According to the affidavit, Monroy also provided Kim with confidential and other proprietary, internal U.S. Navy information.  In exchange for the steering of business and the provision of such information, Kim paid bribes to Monroy, including cash, personal travel expenses, meals and alcoholic beverages, and the services of prostitutes.  The affidavit further alleges that in July 2019, Monroy repeatedly lied to DCIS and NCIS during a voluntary interview. 

Driver pleaded guilty to one count of conspiracy to commit bribery for his role in March 2019 before U.S. District Judge Arthur J. Tarnow of the Eastern District of Michigan.  Kim pleaded guilty to one count of conspiracy to commit bribery for his role on May 1, 2020, before U.S. District Judge Mark A. Goldsmith of the Eastern District of Michigan.

A complaint is merely an allegation and the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law. 

NCIS and DCIS investigated the case.  Trial Attorney Jessee Alexander-Hoeppner of the Criminal Division’s Fraud Section is prosecuting the case. 

Chinese National Sentenced To 40 Months In Prison For Conspiring To Illegally Export Military And Space-Grade Technology From The United States To China

The U.S. Justice Department released the below information:

On October 16, 2019, United States District Judge Diane J. Humetewa sentenced Tao Li, a 39-year-old Chinese national, to 40 months in prison, followed by three years of supervised release.  Li had previously pleaded guilty to conspiring to export military- and space-grade technology to the People’s Republic of China without a license in violation of the International Emergency Economic Powers Act. 

“This case is one of many involving illegal attempts to take U.S. technology to China.  Li attempted to procure highly sensitive U.S. military technology in violation of our export control laws.  Such laws are in place to protect our national security, and the Department of Justice will continue to vigorously enforce them,” said Assistant Attorney General John C. Demers. “We don’t take these crimes lightly and we will continue to pursue them.”

“If you steal our military and space technology, you should expect to go to prison,” said Michael Bailey, United States Attorney for the District of Arizona. “But for the diligent work of HSI and the Defense Criminal Investigative Service, our nation’s security would’ve been damaged by Mr. Li.”

“Li’s sentencing was the result of a highly successful joint investigative effort with our law enforcement partners and the U.S. Attorney’s Office that prevented U.S. military technology from falling into the wrong hands,” said Bryan D. Denny, Special Agent in Charge of the Defense Criminal Investigative Service, Western Field Office.  “It also reaffirms our commitment to protecting America from this type of activity and, equally so, serves as a warning to those intent on illegally exporting our technologies that the Defense Criminal Investigative Service and its partners will pursue these crimes relentlessly.”

“This sentence is well deserved and further demonstrates the lengths of criminal activity by those who seek to engage in illegally obtaining sophisticated materials,” said Scott Brown, Special Agent in Charge for Homeland Security Investigations (HSI) Phoenix. “One of HSI’s top priorities is preventing U.S. military products and sensitive technology from falling into the hands of those who might seek to harm America or its interests. We will continue to aggressively pursue violators wherever they may be.” 

Between December 2016 and January 2018, Li worked with other individuals in China to purchase radiation-hardened power amplifiers and supervisory circuits and illegally export them from the United States to China.  The electronic components sought by Li are capable of withstanding significant levels of radiation and extreme heat, and as a result, are primarily used for military and space applications.  Due to the technological capabilities of the electronic components sought by Li and the significant contribution that the components could make to a foreign country’s military and space programs, both parts required an export license from the U.S. Department of Commerce, Bureau of Industry and Security, prior to being sent out of the United States. Notwithstanding the licensing requirement, the Department of Commerce has a policy of denial to export these types of electronic components to the People’s Republic of China.

Between December 2016 and January 2018, Li, who resided in China, used multiple aliases to contact individuals in the United States, including representatives of United States-based private companies, to try to obtain the electronic components. Additionally, Li and his coconspirators agreed to pay a “risk fee” to illegally export the electronic components to China.  In furtherance of his request, Li wired money from a bank account in China to a bank account in Arizona.  Li was arrested in September 2018 at Los Angeles International Airport, as Li attempted to travel from China to Arizona to meet with one of the undercover agents. 

The investigation in this case was conducted by HSI and DCIS.  The prosecution was handled by Todd M. Allison and David Pimsner, Assistant United States Attorneys, District of Arizona, Phoenix, with assistance from Scott Claffee, Trial Attorney, Department of Justice National Security Division.