Army Contractor Pleads Guilty to Kickback Scheme
According to the Department of Justice, Anthony Martin, 58, a former employee of Houston-based KBR Inc., was to receive more than $200,000 in kickback payments for awarding subcontracts to the Kuwaiti company. The Justice Department noted that the kickback payments were incorporated into the prices of the subcontracts paid by the U.S. military.
In support of the “Theater Transportation Mission,” in mid-June 2003, KBR was required to provide the U.S. military with 50 semi tractors and 50 refrigeration trailers for a six-month period. Martin admitted in a federal court to participating in a kickback scheme in which the Kuwaiti company agreed to pay Martin 50 Kuwaiti dinars – approximately $170 – per semi tractor per month under any government subcontract Martin awarded to the company.
On June 17, 2003, Martin awarded a $4.67 million subcontract to the Kuwaiti company. Under the kickback agreement, according to the Justice Department, Martin was to receive kickback payments of approximately $50,240, including $10,000 Martin already had received as an advance.
Martin Admitted to Additional Fraudulent Procurement
During the plea hearing, Martin admitted to additional illegal conduct in his award of another subcontract to the same Kuwaiti company in July 2003. On July 11, 2003, according to the Department of Justice, Martin solicited bids in an e-mail sent to a number of potential subcontractors – including the managing partner of the Kuwaiti company – to supply 300 semi tractors and 300 fuel tanker trailers for a six-month period.
At that time, the Justice Department pointed out, the managing partner and Martin still were involved in the kickback scheme in which the Kuwaiti company agreed to pay 50 Kuwaiti dinars per semi tractor per month.
On July 18, 2003, Martin informed the Kuwaiti company that he was awarding the company an $8.87 million subcontract for 150 of the 300 semi tractors at the price of 2,950 Kuwaiti dinars per semi tractor per month. Under the kickback agreement, the Justice Department noted, Martin would have received approximately $150,265 in kickbacks – which Martin again incorporated into the price of the subcontract paid by the U.S. Army.
From February 2003 to February 2004, Martin, a U.S. citizen, worked for KBR in Kuwait as a subcontracts administrator and later as a subcontracts manager. According to the Justice Department, Martin’s duties included solicitation of bids from prospective subcontractors and the negotiation and award of subcontracts on KBR’s behalf under its prime contract, known as LOGCAP III, with the U.S. Army. LOGCAP (Logistics Civil Augmentation Program) is a U.S. Army program that uses civilian contractors to support the logistical needs of U.S. military forces.
Martin Admitted That He Felt Guilty
According to the Department of Justice, Martin admitted that prior to returning to the United States for R&R in July 2003, he transferred the Kuwaiti company’s $10,000 advance to a third party, who deposited the funds in a Kuwaiti bank account. The third party then provided Martin with an ATM card so Martin could access the bank account while on R&R in the United States.
Martin admitted that, prior to returning to Kuwait in late-July 2003, he felt guilty and told the managing partner that he was not going to take any additional money under the kickback agreement.
Martin’s sentencing has been scheduled for Nov. 16 in Peoria, Ill., before U.S. District Judge Joe McDade. The maximum statutory penalty for the offense is 10 years in prison, a fine of $250,000 or both.
The National Procurement Fraud Task Force – formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in contracting activity for national security and other government programs – coordinated the investigation.
