That time when a real property lease in Iraq jumped from $124,000/mo to $665,000/mo

Posted: 2:25 am ET
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And no one noticed for about five months?

ALEXANDRIA, Va. – A former government contractor was sentenced today to four years in prison for his role in a government contract kickback scheme that caused a loss of more than $3.4 million to the U.S. Department of State.

According to court documents, Wesley Aaron Struble, 49, a U.S. citizen of Batangas, Philippines, engaged in a conspiracy to violate the Anti-Kickback Act in 2011 and 2012 while employed in Iraq as a government contractor. Initially employed by a business identified in court documents as Company B, Struble learned that another business, identified in court documents as Company A, was seeking a lease of real property for use related to a U.S. Department of State contract. Struble knew that Company B was paying approximately $124,000 per month to a third business, identified in court documents as Company C, for a lease of real property. According to court documents, Struble became a manager for Company A, and together with another manager for Company A, engaged in a conspiracy with associates of Company C to make the lease of property available to Company A at an inflated rate of $665,000 per month.

Court documents explained that Struble and the other manager of Company A influenced Company A to lease the property at the inflated rate and in return received at least $390,000 in cash kickback payments from associates of Company C. Struble then concealed cash in packages sent back to family members in the United States, including hiding cash inside stereo speakers. Struble also directed that cash be deposited in bank accounts in a manner designed to avoid detection. The U.S. Department of State, which ultimately paid the lease of real property between Company A and Company C, suffered a loss of approximately $3.4 million. In addition to Struble’s prison sentence, he was also ordered to pay approximately $3.4 million in restitution.

Two of Struble’s co-conspirators—Jose Rivera and Emil Popescu—were charged by indictment on March 30, for their roles in the conspiracy. According to court documents, Jose Rivera pleaded not guilty and is scheduled for a jury trial on August 7. The United States is seeking Emil Popescu’s extradition from Romania.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Steve A. Linick, the Inspector General for the U.S. Department of State; and Andrew W. Vale, Assistant Director of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Leonie M. Brinkema. Special Assistant U.S. Attorney Brian D. Harrison and Assistant U.S. Attorney Kimberly R. Pedersen prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:17-cr-44 and 1:17-cr-052.

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USDOJ: FSO Michael Todd Sestak Charged With Conspiracy to Defraud and Conspiracy to Commit Bribery and Visa Fraud

We have blogged previously about this case:

On June 4, the Department of Justice released the following statement:

U.S. Foreign Service Officer Charged With Conspiracy To Defraud the United States and to Commit Bribery and Visa Fraud – Scheme Allegedly Yielded Millions of Dollars in Bribes-

WASHINGTON – A U.S. Foreign Service Officer, Michael Todd Sestak, 41, has been arrested and charged with conspiracy to defraud the United States and conspiracy to commit bribery and visa fraud, U.S. Attorney Ronald C. Machen Jr. and U.S. Department of State Diplomatic Security Service (DSS) Director Gregory B. Starr announced today.

Sestak appeared this afternoon before the Honorable Magistrate Judge Deborah A. Robinson in the U.S. District Court for the District of Columbia. He was arrested on May 13, 2013, in California and had been ordered held without bond following a hearing in the U.S. District Court for the Central District of California. He was removed to the District of Columbia, where the criminal complaint, dated May 6, 2013, was filed against him. Magistrate Judge Robinson ordered that he remain in custody pending further court proceedings.

According to the government’s evidence, Sestak was the Non-Immigrant Visa Chief in the Consular Section of the U.S. Consulate in Ho Chi Minh City, Vietnam from August 2010 to September 2012.

The investigation revealed that, beginning sometime in or around March 2012, Sestak agreed to approve visas to the United States for a fee.  According to an affidavit filed in support of the criminal complaint, he conspired with other U.S. citizens and Vietnamese citizens who worked to recruit customers – or to recruit other recruiters – to the visa scheme. Co-conspirators reached out to people in Vietnam and the United States and advertised a money-back guarantee for a visa to the United States.  They particularly advertised that they could obtain visas for people who would not be able to obtain a visa on their own, such as people who had been previously denied or refused entry into the U.S.  They encouraged customers with the idea that they could overstay their visas and disappear in the United States.

The affidavit alleges that co-conspirators assisted visa applicants with their applications and prepared them for their consular interviews.  Upon submitting an application, the applicants would receive an appointment at the Consulate, be interviewed by Sestak, and approved for a visa.  Applicants or their families paid between $20,000 and $70,000 per visa.

Applicants paid for their visas in Vietnam, or by routing money to co-conspirators in the United States.  According to the affidavit, Sestak received several million dollars in bribes in exchange for approving the visas.  He ultimately moved the money out of Vietnam by using money launderers through off-shore banks.  Co-conspirators also had money laundered through off-shore banks to bank accounts in the United States, the affidavit alleges.

To date, the investigation has seized over $2 million from a co-conspirator’s investment account in the United States.

Two women have been charged in the scheme.They are Hong Vo, 27, an American citizen, and Truc Tranh Huynh, 29, a Vietnamese citizen, who are charged with conspiring with Sestak and others. Vo allegedly assisted with the recruitment of visa applicants and communicated with others about the payment for the fraudulent visas. According to charging documents, fraudulent visas granted by Sestak were connected to an Internet Protocol (“IP”) address controlled by Vo. Huynh allegedly participated in the visa scheme by obtaining documents necessary for the visa applications, collecting money and providing model questions and answers for visa applicants.  Sestak also allegedly approved a visa for Huynh to the United States, the application for which was submitted by the IP address controlled by Vo.

Vo was recently arrested in Denver and is being held there while awaiting removal to the District of Columbia. Huynh was arrested June 3, 2013, and appeared today in the U.S. District Court for the District of Columbia. She remains held without bond pending further proceedings.

Charges contained in criminal complaints are merely allegations that a defendant has committed a violation of criminal laws and every defendant is presumed innocent until, and unless, proven guilty.

The case is being investigated by the U.S. Department of State Diplomatic Security Service and Assistant U.S. Attorneys Brenda J. Johnson and Mona N. Sahaf of the National Security Section and Catherine K. Connelly of the Asset Forfeiture and Money Laundering Section.

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Original statement is available online here.

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