Two separate cases within 8 days
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On September 2, an Oklahoma man pleaded guilty today for his role in a scheme to solicit kickbacks in connection with the award of a private security services subcontract to protect U.S. government personnel and contractors in Afghanistan. The man identified by DOJ as Bryan Lee Burrows, 42, of Wagoner, Okla., pleaded guilty before U.S. District Court Judge Leonie M. Brinkema in the Eastern District of Virginia to one count of conspiracy to solicit a kickback.
In August 2006, USAID awarded a $1.4 billion contract known as the Afghanistan Infrastructure Rehabilitation Project (the AIRP contract). The AIRP contract required the award of numerous subcontracts, including for the provision of security services to protect AIRP workers. According to court documents, from approximately February 2009 through May 2009, Burrows was employed in Kabul, Afghanistan, by Civilian Police International, a Virginia-based company that provides law enforcement training internationally. Burrows admitted that he conspired with others to solicit kickbacks from private security vendors in return for favorable treatment for those potential bidders in connection with the award of one or more subcontracts. According to court documents, the subcontracts provided for private security services to protect USAID personnel and contractors in Afghanistan operating under the AIRP contract.
On September 9, Delmar Dwayne Spier, the chief executive officer and managing director of United States Protection and Investigations, LLC (USPI), pleaded guilty in U.S. District Court for the District of Columbia to conspiracy, major fraud and wire fraud arising from an alleged scheme to defraud the United States. His wife, Barbara Edens Spier, the president and owner of USPI, also pleaded guilty to conspiracy to defraud the United States in connection with U.S.-sponsored rebuilding efforts in Afghanistan.
From the DOJ press release:
According to court documents, USPI, a Houston-based security firm, was a subcontractor for the U.S. Agency for International Development (USAID) based on a USAID contract with the Louis Berger Group Inc. (LBGI) as part of the Rehabilitation of Economic Facilities Program (REFS Program). The REFS Program was developed by USAID to provide a broad range of assistance to the people of Afghanistan. Under the USAID contract with LBGI, LBGI constructed a variety of infrastructure improvements, including electrical facilities, health facilities, schools and irrigation systems. USPI provided security at many LBGI construction sites.
According to court documents, the USPI subcontract was a cost-reimbursement contract, which required LBGI and ultimately USAID to reimburse USPI for all incurred expenses and pay USPI a fee equivalent to a percentage of its incurred expenses.
Delmar Dwayne Spier, 73, of Houston, admitted in his plea before U.S. District Judge Rosemary M. Collyer today that from June 2003 through July 2007, he defrauded the United States by obtaining reimbursement for inflated expenses purportedly incurred by USPI for rental vehicles, fuel and security personnel. Delmar Dwayne Spier and Barbara Edens Spier, 60, also of Houston, admitted before Judge Collyer today that they conspired with USPI employees to fabricate invoices from fictitious companies to obtain reimbursement from LBGI and ultimately from USAID to cover USPI’s inflated expenses.
The Spiers’ plea agreements require them to forfeit $3 million in proceeds that can be traced to the fraud. The conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine. The charge of wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine. The charge of major fraud carries a maximum sentence of 10 years and a $1 million fine. Sentencing has not yet been scheduled for either defendant.
Delmar Dwayne Spier and Barbara Edens Spier were initially indicted, along with former USPI employees William Felix Dupre and Behzad Mehr, on Sept. 30, 2008. Dupre is scheduled to go to trial on Dec. 10, 2009.
In a Mother Jones article profiling the Spiers' company, USPI, Daniel Schulman quoted a contractor saying that "Everyone's accountable in the end." Schulman concludes that "there's a big difference between being accountable and being held to account. The latter comes only after you've been caught."
More to come?
Donald Gambatesa, Inspector General, U.S. Agency for International Development who recently testified at the Subcommittee on National Security and Foreign Affairs hearing on “Afghanistan and Pakistan: Accountability Community Oversight of a New Interagency Strategy” says that his office has opened 44 investigations that have resulted in 8 indictments, 9 arrests, and 3 convictions, and that savings and recoveries have totaled $87 million.
The State Department’s OIG office says that during fiscal year 2009, its Middle East Investigative Branch’s investigations in Afghanistan include: Six (6) open investigations and four (4) preliminary inquiries, covering alleged criminal violations such as Fraud, False Statements, Conspiracy to Distribute a Controlled Substance, Sexual Exploitation of a Minor, Sexual Exploitation of a Third Country National, Unlawful Arrest/Detention, Reprisal, Assault, Embezzlement, Kickbacks, International Traffic in Arms violations, Human Trafficking, and Federal Acquisition Regulations violations.