Texas man, former airman pleads guilty to defrauding US Air Force out of $37M
FILE IMAGE - Cells inside the Suffolk County Correctional Jail Facility in Riverhead, New York on Jan. 16, 2019. (Photo by J. Conrad Williams Jr./Newsday RM via Getty Images)
A former active-duty Master Sergeant of the U.S. Air Force has pleaded guilty to defrauding the U.S. Air Force out of more than $37 million over years of contracting work.
The former airman, a resident of Texas, will be required to pay back less than $1.5 million to the U.S. Department of War.
Former airman pleads guilty
Alan Hayward James, 51, pleaded guilty Wednesday to conspiracy to commit wire fraud, bribery, and conspiracy to rig bids.
James agreed to pay a restitution of at least $1,451,656.80 to the Department of War, according to a Thursday release from the Department of Justice. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors, which could include years of prison time.
Bid rigging conspiracy
James is believed to have fixed contracts to cause overpayments by the military over nine years of work. The DOJ says he and his coconspirators falsely inflated the cost of IT contracts serving U.S. Air Force installations across the Pacific from at least April 2016 until about April 2025.
James and his coconspirators agreed to use the excess funds to pay James, James’ family members, the family of an Air Force civilian employee, and other co-conspirators. As part of this scheme, the conspirators diverted government funds to pay for an all-expenses-paid multi-day stay at a luxury resort on the North Shore of Oahu in 2023.
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From at least May 2019 until about October 2022, the defendant directed co-conspirators who were supposed to be competitively bidding against one another to win government contracts on the amounts they should bid to circumvent the competitive bidding process, the DOJ said. As a result of the defendant’s actions, the government overpaid for IT contracts by at least $37 million.
What they're saying:
"Through this bid-rigging scheme, the defendant not only stole from American taxpayers and harmed companies seeking to compete honestly for government contracts, he also ultimately harmed essential military services designed to keep our nation safe by diverting resources away from other services," said U.S. Attorney Ken Sorenson for the District of Hawaii. "Bid-rigging and anti-competitive behavior in government contracts erodes trust in our institutions, harms taxpayers, and will not be tolerated. We will continue to investigate and prosecute any and all who would seek to manipulate markets and undermine fair competition for their own personal gain."
The Source: Information in this article comes from the Department of Justice.