US Paid $1 Million to Ship Two 19-Cent Washers
The U.S. Defense Department said on Thursday that a flawed system designed to rush supplies to troops in Iraq and Afghanistan let a small-parts supplier improperly collect $998,798.38 to ship two 19-cent washers.
Loopholes in the automated purchasing system have been fixed and the ill-gotten gains were being returned to the U.S. Treasury, said Army Lt. Col. Brian Maka, a Pentagon spokesman.
The lock-washer incident was the last in a series of abuses by twin sisters running a South Carolina company that bilked the Pentagon out of about $20.5 million in fraudulent shipping costs, federal prosecutors said after obtaining guilty pleas earlier in the day.
The owners of C&D Distributors of Lexington, South Carolina, submitted online bids to the Defense Department to supply hardware components, plumbing fixtures, electronic equipment and other items, according to court papers.
Related shipping claims were processed automatically “to streamline the resupply of items to combat troops in Iraq and Afghanistan,” said a statement by Reginald Lloyd, U.S. attorney for the district of South Carolina.
Lloyd said C&D fabricated shipping costs into the hundreds of thousands of dollars, as in the case of the washers, although the value of the items purchased rarely topped $100.
Lock washers place tension against a nut after tightening, to help prevent the nut from loosening.
Maka said the Defense Criminal Investigative Service launched an investigation last September into invoices submitted to the Defense Finance and Accounting Service, or
DFAS.
“DFAS has put in place the internal controls necessary to make sure that something like this doesn’t happen again,” Maka said of the shipping fraud. “The money that they stole will be returned to the U.S. Treasury.”
Charlene Corley, 47, of Lexington, South Carolina, as well as her company, C&D Distributors LLC, pleaded guilty to wire-fraud and money-laundering conspiracy charges in federal court in Columbia, South Carolina.
Darlene Wooten, Corley’s twin and co-owner of C&D Distributors, committed suicide at her lake house last October after being contacted by federal investigators about the fraud, Lloyd said.
The improperly collected funds were used to buy beach houses, luxury cars, boats, jewelry and vacations among other things, prosecutors said.
Conspiracy to commit wire fraud is punishable by up to 20 years’ imprisonment and a $250,000 fine. Conspiracy to commit money laundering carries up to 20 years and a fine of $500,000, or twice the value of the property involved in the laundering transactions, whichever is greater.
Copyright © 2007 Reuters Limited.
“The improperly collected funds were used to buy beach houses, luxury cars, boats, jewelry and vacations among other things, prosecutors said.”
I would call it intent to defraud!
Were they bush voters? Something tells me they were, being tough, entrepreneurial republican types, who saw a market opportunity, designed a better mouse trap and got justifiably rewarded.
America - what a great country! [sarcasm now = off]
“Lock washers place tension against a nut…”
I think the White House could use some of these.
Defrauding the Defence Department of tax dollars, and during a time of war no less should by all rights be considered an act of high treason. Of course, if our government actually prosecuted all these illegal profiteers for treason, the current administration would lose many of it’s financial backers.
I hope that our Justice and Defence Departments put a high priority on seeking out these traitors and prosecute them to the fullest extent of the law.
I also wish to win the lottery. Let’s see which one happens first.
Too bad a whistle blower caught on to this one. These twins and their Pentagon accomplices were on to a really good cash flow.
What the US Defense Dept. calls a flawed system and improper payment, I call theft. On the part of the government, not just the thieves on the outside. I’ve done enough business with Tranportation Officers to know that every GBL (government bill of lading) has not only the value of commodities shipped, but the shipping charges as well. Further, that they are not paid until issued a GBL by a human, and then received signed by another human…thief.
“Darlene Wooten, Corley’s twin and co-owner of C&D Distributors, committed suicide at her lake house last October after being contacted by federal investigators about the fraud, Lloyd said”
Hmmm, committed suicide huh? Or was silenced…
Only someone with bells on their feet would believe that the problem is limited to “a few bad apples” here. At some point the Defense Criminal Investigative Service and the Pentagon are going to close the lid on disclosure of these types of incidents (probably in the name of “National Security”, or by arguing that disclosure “aids the enemy” or some such bullsh*t). The Republicans have done a fine job of sub-contracting the business of war out to private industry, and in doing so they have created perhaps the largest government-funded boondoggle in history. The amount of money that has been thrown (and IS still being thrown) at contractors, and the related fraud, graft and corruption that has followed is the price that the U.S. government (and the U.S. taxpayer) has to pay in order to avoid the necessary conclusion that without throwing boatloads of cash at private contractors we would need a draft. With this much cash flying around, and without any real oversight of course there is going to be fraud; the only real question is the degree of the fraud, and with the Pentagon (an arm of government) being both the fox, and the chickens in this scenario does anybody really believe that they are going to tell us how badly we have been screwed?
This is crazy. While ignoring the plight of millions of US citizens who are hungry and homeless, the US government is simply allowing the already “fattened ones” to “fatten” even more at the expense of the hard working common people. The government took many years to raise TWO DOLLARS for the hard working people. But it does not bother about “the fattened ones” making money at will.
Shameless government!!!!!!!!!!!!
Greedy Republican capitalism at its best. Lock them up and throw away the key, filthy war profiteering, murdering scum.
Back in 2001 I informed “Washington”, Democrats included, what administrators at the VA were doing (BONUSES), all the way to the White House, I went so far as to submit a suggestion (thru the channels) to change what and how they were being allowed to steal this money. Everything has fallen on deaf ears, maybe because the “employees” I’ve had to go thru,are the very same people stealing this money. Imagine that, Washington doing nothing even when informed properly. Why do I still care, because it’s going on over 1/4 BILLION Dollars since I first whistleblowed this. Plus, I know the other Federal Departments are doing it too! Hell of alot of money going to bank accounts for no good reason.
So they caught one, what about Haliburton, KBR and the rest of them?
The above posts have it right. This administration is doing this deliberately, and on working people’s tax money, since the corporations don’t have to pay taxes (I’m not including small businesses in this, who are also being screwed out of existence). This is all part of this administration’s intention to destroy government. But it is infuriating that they are using our tax dollars to do it while bridges and schools fall apart, and Bush denies health care to children while they go hungry and homeless.
marctileston, the story said they got away with it because the Defense Dept went to an automated system of payment, no human scrutiny. Of course in their larcenous hearts, they knew what the outcome would be. I’m wondering when they went to this system (how much of our money has been stolen?)
By the way, that $2 minimum wage increase will take it’s time coming. It’s only gone up 70 cents so far, and by 2009, inflation will have us running backwards again. Of course, milk has increased by a dollar a gallon in the last year, ditto a dozen eggs, and we’re just getting started.
We need a modern day Robin Hood. We have one, his name is Dennis Kucinich.
last time I checked, Robin Hood didn’t surrender to the Sheriff–which Kucinich did in 2004 when he abandoned his antiwar principles for John Kerry and his pro-war party.
the robin hoods of this country will only stand up when the draft is reinstated.
…or “american idol” goes to commercial.
Does the Pentagon need any $6,000 shower curtains or $7,600 coffee makers? It probably could have gotten a better deal for those washers on eBay.
Our lusty news media should find out the party affiliation of the twin sisters and report it widely. They certainly sound like Bush Republicans! What crass effrontery.
Who are the dumb jerks who pay these bills?
If I get a bill that is too high I don’t pay it. I guess the fact that I am spending my own money may be important here.
“Our lusty news media should find out the party affiliation of the twin sisters and report it widely.”
And their campaign contributions.
Ever get the feeling you are in the wrong business ?
I pull lock washer all the time at my job. 1 million dollars. Hmmm. That would fix up a few dilapidated properties.
Yeah, I.M., you and me both.
America is bankrupt in so many ways.
ejmurphy-Yeah, I’d be interested in that also. If they’re both registered neither D or R, I’ll bungee off of the Liberty Bridge.
A person who pays thousands of dollars for a screw deserves to get screwed. This includes all who voted for this inept and theocratic despot, thus helping him steal the presidency. Unfortunately we who voted against him must also suffer the consequences.
Robert, what we need here is a washer. If the citizens could just wash Washington… instead of the other way around… hmm..
We are the payers. That is the trouble. The Administration lives off of our dollars. Their extravagance is funded by our impotence and ignorance. And we thought we were keeping the streets!
I guess they weren’t sleeping with the right folk….
drop in bucket compared to the untouchable haliburton.
I think this story is a setup to divert attention from the BILLION DOLLAR war-profiteering of Halburton et al, and to give that the impression that “a few rotten apples” slipped through the cracks, but don’t worry, it’s all better now.
About as subtle as a brick in a boxing glove.
Liberty & Justice
sj
www.spartacusjones.com