Pentagon Paid $999,798 to Ship Two 19-Cent Washers to Texas

[BrAinPaiNt]

LINK



Tony Capaccio Thu Aug 16, 11:59 AM ET

Aug. 16 (Bloomberg) -- A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to a Texas base, U.S. officials said.

The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.

The owners of C&D Distributors in Lexington, South Carolina -- twin sisters -- exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled ``priority'' were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.

C&D's fraudulent billing started in 2000, Stroot, the Defense Criminal Investigative Service's chief agent in Raleigh, North Carolina, said in an interview. ``As time went on they got more aggressive in the amounts they put in.''

The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said.

``The majority, if not all of these parts, were going to high-priority, conflict areas -- that's why they got paid,'' Stroot said. If the item was earmarked ``priority,'' destined for the military in Iraq, Afghanistan or certain other locations, ``there was no oversight.''

Scheme Detected

The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000. That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

The Pentagon Defense Logistics Agency orders millions of parts a year. Stroot said the agency and the Defense Finance and Accounting Service, which pays contractors, have made major changes, including thorough evaluations of the priciest shipping charges.

A review of paid shipping invoices showed that fraudulent billing is ``is not a widespread problem,'' she said.

``C&D was a rogue contractor,'' Stroot said. While other questionable billing has been uncovered, nothing came close to C&D's, she said. The next-highest contractor billed $2 million in questionable transport costs, she said.

Guilty Pleas

C&D and two of its officials were barred in December from receiving federal contracts. A federal judge in Columbia, South Carolina, today accepted the guilty plea of the company and one sister, Charlene Corley, to one count of conspiracy to commit wire fraud and one count of conspiracy to launder money, Assistant U.S. Attorney Kevin McDonald said.

Corley, 46, faces a maximum prison sentence of 20 years on each count and will be sentenced in the near future, McDonald said in a telephone interview from Columbia. Stroot said her sibling died last year.

Corley didn't immediately return a phone message left on her answering machine at her office in Lexington. Her attorney, Gregory Harris, didn't immediately a phone call placed to his office in Columbia.

Stroot said the Pentagon hopes to recoup most of the $20.5 million by auctioning homes, beach property, jewelry and ``high- end automobiles'' that the sisters spent the money on.

``They took a lot of vacations,'' she said.

[zrinkill]

Pathetic.

[Mavs Man]

I hope they spent the money well. They're going to be doing a lot of time in less than five star accomodations.

Edit: Odd that her twin sister dead last year - the surviving one is only 46. That's young.

[Hoov]

LOL, they took a lot of vacations.

The thing that gets me is they could have done a couple transactions and stopped and maybe never got caught, they went to the well too many times, how could they not think eventually someone wouldnt notice.

[AtlCB]

[ConcordCowboy]

This stuff happens so much that we just shake or bang our heads over it but nobody in our Government EVER seems to do anything about this crap.

What the Hell.

[burmafrd]

Working for the DOD I see this all the time. Sadly the rest of the federal government is no better. And yet the Libs want the federal government to have more power and do more things.

[Hoov]

Originally Posted by burmafrd

Working for the DOD I see this all the time. Sadly the rest of the federal government is no better. And yet the Libs want the federal government to have more power and do more things.

I dont know what the DOD is, but can you and i partner up and get in on some action.

[03EBZ06]

Originally Posted by Hoov

I dont know what the DOD is, but can you and i partner up and get in on some action.

DoD = Department of Defense

It's horrible that people are taking advantage of a war and horrible automately accounting system.

[silverbear]

Originally Posted by BrAinPaiNt

LINK



Tony Capaccio Thu Aug 16, 11:59 AM ET

Aug. 16 (Bloomberg) -- A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to a Texas base, U.S. officials said.

I guess the price of bubble wrap has gone through the ceiling...

[silverbear]

Originally Posted by burmafrd

Working for the DOD I see this all the time. Sadly the rest of the federal government is no better. And yet the Libs want the federal government to have more power and do more things.

LOL... you get your paycheck from the government, yet rail against it... sounds pretty hypocritical to me...

If government is so evil, you really oughta stop taking their money... but so long as you are willing to cash your paychecks, it'll be hard for any of us to take your criticisms seriously...

[silverbear]

Originally Posted by 03EBZ06

DoD = Department of Defense

It's horrible that people are taking advantage of a war and horrible automately accounting system.

Businesses have been ripping of the government for decades, this is hardly some new phenomenon... if the Feds would just enforce the laws they have on the books, and put some of these bastidges behind bars where they belong, perhaps this sort of thing would stop... but the plain truth is, the guys who are ripping the government off are often the ones bankrolling the candidates...

[trickblue]

Originally Posted by silverbear

Businesses have been ripping of the government for decades, this is hardly some new phenomenon... if the Feds would just enforce the laws they have on the books, and put some of these bastidges behind bars where they belong, perhaps this sort of thing would stop... but the plain truth is, the guys who are ripping the government off are often the ones bankrolling the candidates...

True... true... and true...

If it isn't the businesses, it is their congressman...

I don't care much for Obama, but he hit the nail on the head today...

He said that the problem is not Mr. Bush. You can change parties, but if you don't change philosophy you have the same problem.

This is so true. He stepped out on the limb and it will cost him.

I am SO sick of party politics...

Obama had little chance to begin with as the media fawns all over Hillary, but him telling the truth will bury him...

[k19]

Not suprised. I through away helicopter parts that cost between 5k and 9k all the time because the repair cost exceeds whatever precentage of the cost of a new one. If its a burnt out display segment or a broken knob its still trash, I just dont get it

[arglebargle]

IF these no account small fish suppliers can get away with this, think of what the Haliburton's of the world can do. Corporate welfare to the max.