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

Discussion in 'U.S. Politics' started by Truth-Bringer, Aug 19, 2007.

  1. Truth-Bringer

    Truth-Bringer New Member

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

    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.

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  2. heyjude

    heyjude New Member

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    All of my life this kind of stuff has been happening. And always with the Defence Dept. I guess it you have quad-trillions of dollars to throw around, its hard to keep track of the small stuff.

    Read once about a Captain in Alaska who lost a tug boat. He went to a friend and his friend listed the loss with the mess losses.
    Lost: 5 tablecloths
    16 bowls, serving
    3 boats, gravey
    1 boat, tug.
     
  3. Dr.Who

    Dr.Who Well-Known Member

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    This is more widespread than the defense department.


    The real question is do we really want to give the government any more power over our lives when they do stuff like this?
     
  4. DemocratLupis

    DemocratLupis New Member

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    I say disban the government it sucks anyways!
     
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