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  1. #1
    Atomic Punk
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    Default Pentagon Paid $998,798 to Ship Two 19-Cent Washers

    Aug. 16 - 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.''

    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.

    Dawn Dearden, a spokeswoman for the logistics agency, said finance and procurement officials immediately examined all billing records. Stroot said the review showed that fraudulent billing is ``is not a widespread problem.''

    ``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.

    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, was fined $750,000. She 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 return 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.

    --------------------

    Defense Contractor Was Paid $1 Million to Ship 2 Washers

    A South Carolina defense contractor pleaded guilty yesterday to bilking the Pentagon out of $20.5 million over nearly 10 years by adding hundreds of thousands of dollars to the cost of shipping spare parts such as metal washers and lamps. The parts were bound for key military installations, including those in Iraq and Afghanistan. In one instance, in 2006, the government paid C&D Distributors $998,798 in transportation costs for shipping two 19-cent washers. Charlene Corley, 47, co-owner of C&D Distributors, used the money to pay for luxury homes, cars, plastic surgery and jewelry, according to court documents.

    "It is a troubling case because the fraud took place during a time of war," said Kevin McDonald, the first assistant U.S. attorney for the District of South Carolina. The $20 million "that could have gone to assist our military was diverted and used in a fraudulent manner for excessive personal enjoyment."

    C&D supplied small hardware components, plumbing fixtures and electronic equipment to the military, according to court records. The company used a government system that fast-tracked items to priority military installations. C&D submitted the shipping costs separately and the system paid them automatically, the documents said.

    The Pentagon paid 112 of the fraudulent invoices until the scheme was detected last September, according to the documents. Since then, steps have been taken to improve the system's internal controls, said a Pentagon spokesman, Lt. Col. Brian Maka.

    Among the invoices was a 2004 order for a single $8.75 elbow pipe that was shipped for $445,640, according to the documents. Also that year, a $10.99 machine thread plug was shipped for $492,096. Last year, six machine screws worth a total of $59.94 were shipped at a cost of $403,436.

    Corley acknowledged her role in the fraud but maintains that her twin sister, the co-owner of the business, was the main benefactor, said her attorney, Greg Harris. The sister, Darlene Corley, committed suicide last October after being approached by federal investigators, according to a statement from the U.S. attorney's office.

    "We do not dispute that we participated and benefited in and from the conspiracy," Harris said. "We have, however, always maintained that her sister was the primary actor in this fraud, the primary beneficiary of this fraud, and unfortunately she is not here to today to assist us in distinguishing their roles in the fraud."

    Charlene Corley is hoping to reduce her potential prison time -- 20 years each for two counts of conspiracy -- by continuing to cooperate with authorities, Harris said. "Over the past eight months, we have assisted the government with identifying, maintaining and liquidating assets purchased with moneys from this fraud," he said. "We will continue to do this during the coming months."

    Among the items Corley and C&D will forfeit, according to court documents, are six pieces of property, a bank account with $2.6 million in cash, and 10 vehicles, including a black 2007 BMW and a silver Mercedes-Benz. In addition, the money was used to buy five businesses, including the cookie store Dough and Cookie.
    "Watch what people are cynical about, and one can often discover what they lack.” -- Gen. George S. Patton

  2. #2
    Atomic Punk
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    Corley, 46, was fined $750,000. She faces a maximum prison sentence of 20 years on each count and will be sentenced in the near future
    Good start.

    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.
    Good, keep going...


    Corley acknowledged her role in the fraud but maintains that her twin sister, the co-owner of the business, was the main benefactor, said her attorney, Greg Harris. The sister, Darlene Corley, committed suicide last October after being approached by federal investigators
    There we go! See you in hell, bitch.

    We have, however, always maintained that her sister was the primary actor in this fraud, the primary beneficiary of this fraud, and unfortunately she is not here to today to assist us in distinguishing their roles in the fraud."
    The old "Blame the dead defendant" ploy. It always works.
    "Nothing is ever what it seems but everything is exactly what it is." - B. Banzai


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  3. #3
    Atomic Punk ZeoBandit's Avatar
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    Nice system the government has there.
    "What we are dealing with here, is a complete lack of respect for the law" - Jackie Gleason, Smokey and the Bandit

    www.geocaching.com - The site where you are the search engine.

  4. #4
    Eruption
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    Quote Originally Posted by ZeoHalen View Post
    Nice system the government has there.
    And people wonder why I am so against all unnecessary federal government programs. I wonder how well federal run health care would work...
    Go Bills and Sabres!

    We're NOT Lawyers! www.werenotlawyers.com

  5. #5
    Atomic Punk Dave's Dreidel's Avatar
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    Unfortunately, our governmental system is based upon a moral and honest populace.

  6. #6
    Eruption
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    Quote Originally Posted by Dave's Dreidel View Post
    Unfortunately, our governmental system is based upon a moral and honest populace.
    I think one could take your statement to mean "it is unfortunate how our government is set up," instead of how I think you meant it (as a shot at the populace). I would rather say: Unfortunately, our population is no longer moral nor honest enough for the great republic formed here to work as intended.

    I agree with what you were saying if I read it correctly.
    Go Bills and Sabres!

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  7. #7
    Atomic Punk
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    Since then, steps have been taken to improve the system's internal controls, said a Pentagon spokesman, Lt. Col. Brian Maka.
    Goody!!
    Utilize. Improvise. Adapt. Overcome.

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