DOJ: Former US Air Force Master Sergeant pleads guilty to taking kickbacks for IT contracts

article

The seal of the U.S. Department of Justice is seen on a podium during a press conference. The DOJ has launched its largest-ever victim compensation fund for survivors of sex trafficking facilitated through Backpage.com. (Photo by Anna Moneymaker/Getty Images)

The Department of Justice (DOJ) says a former U.S. Air Force Master Sergeant has pleaded guilty to a multiyear scheme in which he fraudulently inflated information technology (IT) contracts for the U.S. Pacific Air Forces (PACAF) by $37 million and took excess funds to pay himself, family members, the family of an Air Force civilian employee, and other co-conspirators.

The DOJ says Alan Hayward James, 51, of Texas, pleaded guilty to conspiracy to commit wire fraud, bribery, and conspiracy to rig bids. 

The backstory:

The U.S. District Court in Honolulu, Hawaii, says the scheme started in April 2016 with James and his co-conspirators falsely inflating the cost of IT contracts for U.S. Air Force installations across the Pacific.  The investigation revealed the scheme lasted for several years and from at least May 2019 until about October 2022, James directed co-conspirators — who were supposed to be competitively bidding against one another to win government contracts — on how much to bid to circumvent the competitive bidding process. The DOJ says as a result of James’ actions, the government overpaid for IT contracts by at least $37 million.

The plea agreement states that in 2023, the conspirators diverted government funds to pay for an all-expenses-paid stay at a luxury resort on the North Shore of Oahu lasting several days.

What they're saying:

"Over thirty-seven million dollars — that’s how much the U.S. Air Force overpaid because of the scheme that the defendant admitted to, under oath and in open court." said Acting Deputy Assistant Attorney General Daniel Glad of the Justice Department’s Antitrust Division in a release. "Criminals who rig bids and commit fraud on government contracts steal from taxpayers and threaten the public’s confidence in government institutions. The Antitrust Division’s Procurement Collusion Strike Force will detect and prosecute those who rig bids and defraud their government customers."

What's next:

James faces up to 20 years in prison and a $250,000 fine for wire fraud, up to 15 years in prison and a fine of either $250,000 or three times the monetary value of the bribe, for bribery and 10 years in prison and a $1 million fine for conspiracy to rig bids.

The DOJ says James agreed to pay a restitution of at least $1,451,656.80 and a federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.