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Joined: 09 Jan 2003
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 Posted: Fri Aug 17, 2007 8:46 am Post subject: Hardware firm charges Pentagon $1m to deliver two washers |
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Hardware firm charges Pentagon $1m to deliver two washers
James Orr and agencies
Friday August 17, 2007
The owner of a hardware company has admitted to defrauding the Pentagon out of more than $20m (�10m), in one case charging almost $1m for shipping two washers costing a mere 19 cents. Charlene Corley, who owned hardware equipment supply company C&D Distributors LLC with her sister, the late Darlene Wooten, now faces up to 20 years in prison.
Prosecutors said other fraudulent charges made by the sisters included $492,097 to ship an $11 threaded plug and $499,569 to ship 10 cotter pins worth $1.99 each.
A Pentagon spokesman, Lieutenant Colonel Brian Maka, said a detailed investigation had revealed how the company had sometimes double-billed for supplies or charged the department even when the government had decided to refuse its services. The billing of the washers was one of the most egregious charges, Lt Col Maka said. An assistant US attorney, Kevin McDonald, said C&D Distributors LLC still owed as much as $750,000 in fines. But he added that the firm had repaid $4m to the government and that an additional $7m of the company's assets, including beach houses, had been seized.
Over a period of nearly 10 years, the firm exploited an automated shipping payment system designed to speed up shipments of goods bound for US forces overseas. The payment system had since been changed to prevent suppliers taking advantage of the process, Mr McDonald said.
"Its intent was a good one, and it was to get items directly to the troops wherever they might be as quickly as possible without running into the red tape of manually approving costs," he said.
Corley's lawyer, Greg Harris, said Wooten handled bidding and shipping for the company and was directly responsible for the fraud. Wooten committed suicide in October last year after being contacted by the authorities about the case, according to prosecutors. Before doing so, she wrote a $4m cheque to the defence department, Mr McDonald said.
The defence department is now investigating further cases of fraudulent charges by other contractors, Lt Col Maka said, although he could not specify how many. "We're going to do whatever it takes to retake the money that's stolen from us," he said. The date for Corley's sentencing has not yet been set. |
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