Georgia Tech Procurement Assistance Center

Government contractor found guilty of theft of government property

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A former government contractor has been found guilty for his role in a scheme to unlawfully convert U.S. government property from the U.S military base at Kandahar Airfield, Afghanistan, shipping items to his home in Arizona for resale.

After a three day trial, Michael Dale Gilbert of Arizona was convicted of three counts of theft and unauthorized sale of government property and one count of interstate transportation of stolen property.  Gilbert’s sentencing is scheduled for Oct. 9, 2018 before U.S. District Judge G. Murray Snow of the District of Arizona, who presided over the trial.

According to the evidence admitted at trial, Gilbert worked at PAE Government Services, a government contractor that provides logistics and other support to the U.S. Department of State (DOS) and the U.S. Department of Defense around the globe, including Afghanistan.

  • From 2012 to 2015, Gilbert was deployed to Kandahar Airfield (KAF), where he assisted DOS with the Foreign Excess Personal Property (FEPP) program.
  • Once equipment, including computer equipment, heavy construction items and work tools, was requested through the FEPP program at KAF, Gilbert was assigned to arrange for its transfer for use or for its destruction, to prevent the items from falling into the hands of insurgents.
  • While in that role, in or around April and December of 2014, instead of facilitating the transportation or destruction of U.S government property, Gilbert shipped FEPP to the United States and transported the items to his residence in Arizona.
  • Gilbert stole FEPP items worth at least $48,900, including items recovered from his residence in Arizona valued at approximately $16,700, approximately $3,700 in sales through eBay, and goods valued at approximately $28,500 that Gilbert sold through other means, the evidence showed.

This case was investigated by the DOS Office of the Inspector General and the Special Inspector General for Afghanistan Reconstruction.

Source: https://www.justice.gov/opa/pr/government-contractor-found-guilty-theft-government-property

Lockheed agrees to pay $2 million to settle Air Force government-furnished fuel overcharge allegations

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Lockheed Martin Corporation (Lockheed) has agreed to pay $2 million to settle allegations that it overbilled the government for fuel it used while manufacturing C-130 aircraft for the United States Air Force.  Announcement of the settlement was released on Friday, Mar. 27, 2015.

“The resources of the United States Government are limited and must be protected.  We expect companies doing business with the United States to be circumspect and forthright in billing the United States and using its resources,” said Acting U.S. Attorney John Horn.  “Here, in causing the government to pay for fuel that was the company’s financial responsibility, Lockheed failed to live up to the terms of the contracts and caused financial injury to the government.  The settlement reflects our resolve to ensure that companies that overbill or overcharge the Government will be identified and held responsible for their actions.”

“This settlement illustrates the diligent work exhibited by a joint Air Force Office of Special Investigations and DCIS investigative team, that sifted through and unwound dense and complicated data to reveal the overcharges,” said Lloyd Clark, Assistant Special Agent in Charge, AFOSI Procurement Fraud Detachment Five.

“This settlement is the culmination of the tireless investigative efforts of DCIS agents working closely with our Air Force OSI partners,” said John F. Khin, Special Agent in Charge, Southeast Field Office.  Combatting waste and abuse in Department of Defense contracts to protect the integrity of our national defense programs, remains a top priority for the Defense Criminal Investigative Service.”

Between 2006 and 2013, Lockheed manufactured C-130s for the U.S. Air Force at its Marietta, Georgia facility.  Pursuant to the underlying contracts, the Government provided Lockheed with up to 22,000 gallons of fuel (characterized as government furnished property or “GFP”) per aircraft, which could be used for the engine runs, fuel operations and test flights necessary to manufacture C-130s.  Once Lockheed exhausted its 22,000 gallon allotment on a particular aircraft, Lockheed, not the Government, was financially responsible for any additional fuel.

However, the government’s investigation indicated that between 2006 and 2013, Lockheed routinely used fuel in excess of the 22,000 gallons, but failed to reimburse the government for the excess.  Additionally, the evidence suggests that Lockheed used the fuel on other unrelated projects, where the government was either not a party, or had not agreed to furnish fuel.

This matter was investigated by the United States Air Force Office of Special Investigations, the Defense Criminal Investigative Service, and Defense Contract Audit Agency.

In addition to the C-130, Lockheed’s Marietta plant produces the center wing assembly for three versions of the F-35. The assembly is then shipped to Fort Worth, Texas, where the plane’s production is completed. The Marietta plant also supplies the stealth coating on the fighter’s horizontal and vertical tails. The plant also modernizes Air Force C-5 airlifters and builds wings for the P-3 Orion patrol aircraft.

Source: http://www.justice.gov/usao/gan/press/2015/03-27-15.html

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