SIGAR | Special Inspector General for Afghanistan ReconstructionReport Fraud, Waste or Abuse

Criminal Cases

  1. Gallery of Greed
  2. Recent Criminal Cases
Gallery of Greed

 U.S. reconstruction activities in Afghanistan, or any other conflict zone, face the constant threat of criminal conspiracies among personnel who rotate in and out of theater, infecting their successors with the virus of corruption.

 Over the past five years, SIGAR’s Investigations Directorate has uncovered and detailed a classic example of this threat—an extended, widespread, and intricate pattern of criminality involving U.S. military personnel and Afghan contractors at the Humanitarian Assistance Yard (the Yard) at Bagram Airfield near Kabul, Afghanistan.

 In June 2012, SIGAR investigators following leads uncovered an unusual pattern of suspect criminal activity at the Yard. They found traces of criminal activity affecting inventories, accounting, issuance of supplies, payments, and contract oversight at the Yard, which serves as a storage-and-distribution facility for millions of dollars’ worth of clothing, food, school supplies, and other items purchased from local Afghan vendors. U.S. military commanders provided those supplies to displaced Afghans as part of the Commander’s Emergency Response Program (CERP) to meet urgent humanitarian relief needs for the Afghan people.

 As the SIGAR investigators, conducted interviews, checked records, and scrutinized other evidence, they confirmed that U.S. military personnel, stateside contacts, and local Afghans had conspired in bribery, fraud, kickbacks, and money laundering. Among other improper acts, U.S. personnel took bribes from vendors or from Afghan interpreters who wanted to steer supplypurchase business to favored vendors.

 The conspiracies pervaded activities at the Yard, and persisted for years as new personnel were assigned there and, in some cases, adopted the corrupt practices of their predecessors or their new colleagues. Some of the participants stayed involved remotely after they returning to the United States.

 The SIGAR investigation, whether conducted independently or in cooperation with the International Contract Corruption Task Force, focused on suspect paying agents and project purchasing officers responsible for administering the replenishment contracts and on military members responsible for paying vendors.

 The assembled evidence of corruption from this investigation led to a series of guilty pleas, prison terms, and forfeiture agreements as offenders were held accountable for their deeds and their dereliction of duty. The following gallery presents summaries of cases resolved or in progress as a result of the work performed by SIGAR Investigations Directorate. The stories illustrate the reality that no matter how well designed a procurement system may be, it requires strict oversight and accountability for the people who operate the mechanism.

Timothy H. AlbrightTimothy H. Albright: An enlisted specialist with the Pennsylvania National Guard, Albright served at Bagram Airfield between January and October 2008 processing Afghan vendors’ invoices for resupplying goods at the Yard. During that time, according to court documents, Albright accepted several payments, ranging from $200 to $10,000, for accelerating payments on an Afghan vendor’s invoices. Albright’s supervisor and an Afghan interpreter allegedly were also involved in the scheme. About $25,000 from the payments was deposited into Albright’s and his wife’s bank account; they used $18,000 of it to buy a car. Albright pled guilty to conspiracy to receive bribes, and on January 27, 2016, was sentenced to a year and a day in prison. He was also ordered to forfeit $16,200 and the car, a 2008 Nissan Maxima. Noting Albright’s previous military service, his post-traumatic stress disorder, and his family’s support, Judge John E. Jones III told Albright during his sentencing, “This case is the proverbial dog’s breakfast. It’s a lousy, lousy deal for everybody involved, but it’s a situation that you caused [by repeatedly taking bribes] and you know it.”
Louis M. BaillyLouis M. Bailly: Between October 2011 and October 2012, Army Staff Sergeant Bailly served at the Yard, and was a project purchasing officer for part of that time. In 2015, the U.S. government filed charges that Bailly had conspired with two Afghan contractors, accepting about $12,000 in bribes for influencing supply-replenishment contracts. Bailly pled guilty to one count of conspiracy to commit an offense or to defraud the United States, and was sentenced to a year and a day in federal prison, followed by a year of supervised release, and forfeiture of $10,000.
Donald P. BunchDonald P. Bunch: A U.S. Navy senior chief, Bunch served from February to August 2009 as yard boss at the Yard, and was responsible for resupplying supplies like rice, beans, and clothing, and overseeing truck loading in support of the Commander’s Emergency Response Program. Federal authorities charged that he took some $25,000 in payments from multiple Afghan vendors in return for moving their firms up in the normal rotation of suppliers, and for giving them larger and more lucrative contracts. Bunch pled guilty to one count of bribery, that is, of accepting something of value by a public official to influence the performance of an official act. In March 2016, he was sentenced to 24 months in federal prison and then 24 months of supervised release, fined $5,000, and agreed to forfeit $25,000.
 The presiding judge at Bunch’s trial told him, “This is not only a disgrace to the uniform that you wear and a disgrace to the country . . . , but also [serves] to encourage this type of corruption and allow it to become more widespread. . . . It undermines the authority and the position of those in government, it undermines the government itself, and it certainly, in Afghanistan and the Middle East, it undermines our efforts at trying to help those people and promote the causes that we’re trying to defend.”
Jerry W. DennisJerry W. Dennis: Dennis was a resident of Horn Lake, Mississippi, whose son Jimmy was a U.S. Army first sergeant serving as a paying agent at the Yard. The federal criminal information document filed against Jerry Dennis charged that for a period extending up to about January 2010, Dennis conspired with his son and with landscaper friend James C. Pittman to have containers of cash from bribes shipped out of Afghanistan and handled in ways that would disguise their nature, ownership, and location. In July 2014, Jerry Dennis pled guilty to one count of conspiracy to commit money laundering. He was placed on probation for two years, including six months’ home confinement, and forfeited $110,000 per a court-approved agreement.
Jimmy W. DennisJimmy W. Dennis: The son of Jerry Dennis (above), Jimmy W. Dennis was a U.S. Army first sergeant serving as a paying agent at the Yard from March 2008 to March 2009. Federal authorities charged him with conspiring with his father and a Chattanooga, Tennessee, landscaping-company owner, James C. Pittman, to move about $250,000 in bribes from Afghanistan to the United States. Dennis and Pittman knew each other from serving together at Fort Campbell, Kentucky, previous to Dennis’s deployment to Afghanistan. Jimmy Dennis pled guilty to one count of conspiracy to commit money laundering. In January 2015, he was sentenced to 41 months’ imprisonment, followed by two years’ supervised release. He also agreed to and has forfeited $115,000 and a Rolex watch.
Ramiro Pena Jr.Ramiro Pena Jr.: Between January 2008 and September 2009, Army Sergeant First Class Pena served as a project purchasing officer at the Yard, maintaining supply orders and inventory levels. His supervisor was First Sergeant Jimmy Dennis (see above). The men processed more than 200 contracts with Afghan vendors worth about $30.7 million total. The federal charge against Pena said Dennis gave him about $100,000 and a Rolex watch from vendor bribes received, and that Pena had shipped money home to his wife. Pena pled guilty to one count of conspiracy to defraud the United States, and in December 2015 was sentenced to 24 months in prison, followed by a year’s supervised release. He agreed to forfeit $100,000 and has forfeited a Harley-Davidson motorcycle and Rolex watch.
James C. PittmanJames C. Pittman: Proprietor of a Chattanooga, Tennessee, landscaping company, Pittman was charged with conspiring with Jerry and Jimmy Dennis (see above) to transfer and launder funds received as bribes in Afghanistan. Pittman had left the military before Jimmy Dennis worked at the Yard, but was still in contact. The charge was that “on numerous occasions,” Pittman received containers of cash from Afghanistan via the Dennises, passed it through his business, and returned most of it to Jerry and Jimmy Dennis as checks for “salary.” Having pled guilty to conspiring to commit money laundering, Pittman was sentenced to a year and a day in prison, followed by a year’s supervised release. He also consented to and has forfeited $25,000.
 The judge at Pittman’s trial noted that “There’s others out there that find themselves in a similar situation to you that would be tempted . . . to do what you did. That is going to be a large part of the sentence I impose today.”
 Pittman marveled that “the Government can track your butt down after five years—”
 “It’s pretty impressive, isn’t it?” the judge interjected.
 Pittman continued. “Old friends and acquaintances from, you know, nearly 14 years in and, you know, text me . . . or whatever and be like, holy crap, you know, they caught you? . . . And I was like . . . they can find you anywhere.”
David A. TurciosDavid A. Turcios: A U.S. Air Force staff sergeant who worked at the Yard, Turcios is awaiting court proceedings. Acting on a complaint filed by a special agent in SIGAR’s Investigations Directorate, the U.S. District Court for the Eastern District of California issued a warrant on May 12, 2015, for Turcios’s arrest. The alleged offenses were conspiracy to violate federal law and defraud the United States, receipt of bribes and gratuities by a public official, and wire fraud.
 Turcios began working at the Yard in November 2010 as a paying agent and contracting officer representative, and was involved with nine CERP supply contracts worth more than $2 million.
 The complaint alleges that Turcios worked closely with two Afghan interpreters who gave him names of vendors they were proposing for contracts; they allegedly also gave Turcios gifts, jewelry, and thousands of dollars, some of which was not paid until after Turcios returned to the United States. The complaint quotes e-mails written during and after Turcios’s tour at the Yard that include references to “refunds” and instructions for wiring funds to a Bank of America account.
 Turcios was arrested on August 17, 2015, and released on his own recognizance pending trial.

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Recent Criminal Cases

Subject Action Investigative Activity
ASM JV (Joint Venture comprising three companies: Aziz Wali Construction Company (AWCC), Shamshad Baden CC and Megayapi) $99 M Contract Termination
Investigation Results in $99 Million Contract Termination

 In 2015, the Afghan Ministry of Public Works (MOPW) used a sole-source selection process to award a contract for the construction of sections 1 and 2 of the Qaisar to Laman Ring Road Project. The sole-source entity selected ASM JV, a joint venture comprising three companies: Aziz Wali Construction Company (AWCC), Shamshad Baden CC and Megayapi. The contract, funded by grants from the Asian Development Bank (ADB), with major contributions from the U.S. government, was budgeted by the Afghan Ministry of Public Works (MOPW) with a final bid amount of $99 million by ASM JV. (According to ADB’s website, the U.S. government has contributed $27 billion to the ADB since 1966 and is ADB’s largest contributor. The ADB also claims to have awarded more than $3.3 billion in grants to Afghanistan.)

 SIGAR initiated a criminal investigation in May 2016 based on allegations that ASM JV was paying bribes and secretly enlisting the help of officials at both the ADB and MOPW in order to secure the contract award; that ASM JV lacked the technical and financial capacity to competently perform this large, complex project; and, that it had failed a December 2015 prequalification evaluation conducted by Hill International (Hill), an American engineering consultant firm MOPW had hired to help administer the project. Despite this, elements in ADB and MOPW continued advocating for ASM JV to be awarded the contract. In July of 2016, ASM JV was given a request for proposal (RFP) for the contract; the two companies who scored higher in pre-qualification were not given an RFP.

 In August 2016, after an extensive investigation involving numerous interviews and reviews of emails and official records associated with MOPW, ADB, and Hill, SIGAR officials notified Afghan President Ghani, via official letter, of the investigative findings, including evidence indicating corruption surrounding the award selection process.

 After submitting the written notice to President Ghani, SIGAR held meetings with relevant high level officials at the palace, including members of the National Procurement Authority (NPA) and presidential advisors at the palace. All the officials expressed appreciation for SIGAR’s investigative work and pledged to work closely with SIGAR to root out the corruption in the contracting process.

 Officials of the NPA worked closely with SIGAR special agents. Their expertise and knowledge provided useful information which greatly assisted in identifying the issues of corruption and other irregularities in the matter. Advisors to President Ghani stated that SIGAR’s investigation confirmed their suspicions that there was something “fishy” about the contract process and subsequent sole-source selection of ASM JV. They said SIGAR’s investigative findings and continued support would prove helpful toward addressing the allegations of corruption and toward recommending a new open bidding for the project.

 Afghan officials acknowledged they were facing extreme, high-level political pressure in this matter and that SIGAR’s findings would help in responding to it. Officials at the MOPW agreed the award process could not move forward as planned and that ASM JV appeared to have an inappropriate relationship with individuals representing ADB.

 In October 2016, officials from the presidential palace notified SIGAR that the palace had terminated the sole source selection of ASM JV. The palace determined that the contract for Ring Road Project sections 1 and 2 would go to an open tender in which any company could bid and compete in a transparent and honest process.

 As a result of SIGAR’s investigation and subsequent close coordination with officials of the NPA and the Palace, a $99 million, improperly awarded, sole-source contract was terminated, avoiding excessive costs to the financing entity, to which the United States is a lead contributor.

Former U.S. Military Members:

Marvin Ware

Reginald Dixon

Larry Emmons II
Sentenced
Former U.S. Military Members Sentenced for Fuel Theft

 On December 14, 2016, in the U.S. District Court of Honolulu, Hawaii, former U.S. Army Sergeant First Class Marvin Ware was sentenced for his role in a fuel-theft conspiracy. For count one, conspiracy to commit bribery, Ware was sentenced to 60 months’ incarceration, and for count two, bribery, he was sentenced to 87 months’ incarceration, to run concurrently. He was also sentenced to three years’ supervised release and was ordered to pay restitution of $765,000 and a special assessment of $200.

 On December 13, 2016, former U.S. Army Sergeant Reginald Dixon was sentenced to 30 months’ incarceration and three years’ supervised release, and was ordered to pay restitution of $573,750 and a special assessment of $100.

 On December 13, 2016, former U.S. Army Specialist Larry Emmons II was sentenced to 21 months’ incarceration and three years’ supervised release, and was ordered to pay restitution of $573,750 and a special assessment of $100.

 Ware, Dixon and Emmons were members of Alpha Company, 325th Brigade Support Battalion (BSB), 25th Infantry Division, at Schofield Army Barracks, Honolulu, Hawaii. They were deployed to Forward Operating Base (FOB) Fenty, Afghanistan, from April 2011 to March 2012. Ware was a senior noncommissioned officer, assigned as the truck master. Emmons, a direct subordinate to Ware, served as a petroleum supply specialist, responsible for loading and transporting water and fuel, including jet fuel (referred to as “JP8”), to other military bases within Afghanistan. Dixon served as a petroleum operator, responsible for fueling military aircraft, primarily helicopters, using tanker trucks known as Heavy Equipment Mobility Tactical Trucks (HEMTTs). During the period of December 2011 through February 17, 2012, at clandestine locations on FOB Fenty and at times not likely to arouse suspicion, the conspirators and others surreptitiously filled 3,000 gallon trucks termed “jingle trucks,” owned by an Afghan trucking contractor, with JP8 jet fuel. In return for facilitating the theft, employees of the trucking contractor paid the soldiers approximately $6,000 per truckload of fuel.

 Information about the conspiracy was reported through the SIGAR Hotline; an investigation ensued. On February 16, 2012, special agents from SIGAR, the Defense Criminal Investigative Service (DCIS), the U.S. Army Criminal Investigation Command Major Procurement Fraud Unit (USACID MPFU), and the U.S. Air Force Office of Special Investigations (AFOSI) surveilled the authorized FOB Fenty fuel point. They observed the conspirators filling two HEMTTs with fuel, which they then drove to a clandestine location on the FOB where four jingle trucks had been prepositioned. Agents videotaped Ware, Emmons, and Dixon filling three of the four jingle trucks. The following morning, February 17, the conspirators were videotaped filling the fourth truck. That same morning, Ware escorted the three Afghan drivers to the jingle trucks and the Afghans attempted to drive the trucks from FOB Fenty’s entry control point, prior to the fourth driver arriving.

 At the entry control point, agents intercepted the jingle trucks and seized from each driver a transportation movement request (TMR) authorizing a fuel delivery mission. Each driver denied knowing the TMRs were fake, and said they had received them directly from Ware. The U.S. Army captain accountable for fuel reviewed the TMRs and confirmed they were fraudulent: no authorized fuel missions were scheduled to depart FOB Fenty on February 17, 2012.

 Approximately 180,000 gallons of fuel were stolen from FOB Fenty during the course of the conspiracy. Replacing the fuel cost the United States government on average approximately $4.25 per gallon, resulting in a combined loss of at least $765,000. According to documents seized from the conspirators during this investigation, fuel on the open market in Afghanistan at that time sold for approximately $11 per gallon, resulting in a profit of approximately $2 million to the local Afghan conspirators.

 In June 2012, in U.S. District Court Honolulu, Hawaii, Dixon and Emmons entered guilty pleas to one count each for bribery. In May 2015, also in U.S. District Court Honolulu, Hawaii, Ware was indicted on charges of conspiracy, bribery, and money laundering. He was subsequently arrested. In March 2016, Ware entered a guilty plea to one count of conspiracy and one count of bribery.

U.S. Army Captain David A. Kline Sentenced
U.S. Army Captain Sentenced

 On December 8, 2016, in the Eastern District of North Carolina, U.S. Army Captain David A. Kline, was sentenced to 10 months’ incarceration and 12 months’ supervised probation. Kline’s sentencing was based on his guilty plea to one count of solicitation and receipt of gratuity, and aiding and abetting the same.

 Kline, while serving as a first lieutenant in the U.S. Army and stationed at Kandahar Airfield, Afghanistan, sought and accepted $50,000 in U.S. currency from a contractor for the U.S. military. From January 2008 to April 2009, Kline was deployed as a member of the 189th Combat Sustainment Support Battalion, and served as the officer in charge of the Movement Control Team. As officer in charge, Kline oversaw the handling of TMRs for the transport of military items, to include fuel and equipment, food, and other supplies.

 Although contracting procedures technically did not permit the authorization officer to specify the particular Afghan trucking company that would perform the transportation, in practice, Kline and others were able to designate the Afghan company of their choice. Kline admitted he sought and accepted $50,000 in U.S. currency from an Afghan national who owned a trucking company doing business on government contracts at Kandahar Airfield, in return for Kline’s facilitation of the award and payment of numerous transportation contracts. The case was investigated by SIGAR, DCIS, Army Criminal Investigation Command (USCID), and the FBI.

Patrick Shawn Kelley Conviction
U.S. Contractor Convicted for Tax Evasion

 On October 14, 2016, in the Northern District of Florida, Panama City Division, Patrick Shawn Kelley pled guilty to evading approximately $109,735 in taxes on approximately $521,120 of taxable income for calendar year 2010, and to evading approximately $74,380 in taxes on approximately $434,886 of taxable income for calendar year 2011.

 An investigation was initiated after a SIGAR financial analysis of transactions conducted by individuals who are deployed or have business interests in Afghanistan. The analysis uncovered suspicious information concerning Kelley, the owner of Florida-based construction company, American Construction Logistics Services (ACLS), which operated in Kabul, Afghanistan, beginning in 2008. The company managed various contracts in Afghanistan, performing construction work at the Kabul airport, the American embassy and various outlying bases.

Willis Epps Sentenced
Former U.S. Army Contracting Official Sentenced

 On December 13, 2016, in the Northern District of Alabama, Willis Epps was sentenced to five months’ incarceration and five months’ home detention while on a year’s supervised release, and was ordered to pay $16,470 in restitution. On June 8, 2016, following a two-and-a-half-day trial, a federal jury convicted Epps on one count of signing a false tax return. The evidence at trial revealed that Epps, a former contracting official for the U.S. Army Contract Command who handled contract matters for the Non-Standard Rotary Wing Program (NSRWA) at Redstone Arsenal, knowingly signed and filed a false income tax return for calendar year 2013, in which he failed to report $56,250 of income he received in 2013.

 After retiring from the U.S. Army in January 2013, Epps and two other individuals were awarded a consulting contract under the business name of BioTech from a helicopter manufacturing firm, MD Helicopters, in the amount of $250,000. During this time frame, former NSRWA project manager Norbert Vergez, with whom Epps had previously worked during his assignment with the NSRWA, was serving as executive vice president for Patriarch Partners, the parent company for MD Helicopters, and influenced MD Helicopters to issue the contract to BioTech. MD Helicopters paid BioTech, which then paid Epps with a cashier’s check that he failed to report as income on his 2013 tax return.

 The investigation was jointly conducted by SIGAR, the FBI, DCIS, USCID and the Internal Revenue Service (IRS).

Sheldon J. Morgan Sentenced
U.S. Military Member Sentenced for Bribery Conspiracy

 On October 21, 2016, after pleading guilty to conspiracy to commit bribery in U.S. District Court, Fairbanks, Alaska, Sheldon J. Morgan was sentenced to four months’ imprisonment and two years’ supervised release, and was ordered to pay $37,300 in restitution, forfeit $10,020 in bribe money, and pay a special assessment of $100.

 From May 2010 until May 2011, Morgan, then a specialist in the U.S. Army, was deployed at FOB Fenty near Jalalabad, Afghanistan, which served as a hub for distribution of fuel to nearby military bases. Fuel would be brought to FOB Fenty in large trucks, downloaded for storage, and then transported to other bases as needed in smaller trucks. Morgan’s duties included assisting in overseeing the distribution of fuel to the bases.

 A translator employed by an Afghan trucking company at FOB Fenty asked Morgan to allow him to steal fuel in exchange for money. On two occasions in December 2010, Morgan arranged for the Afghan translator to steal a truckload of fuel, accomplished by inserting an extra 5,000 gallon tanker truck into an already scheduled mission without proper paperwork. In return, the translator promised Morgan $5,000 per truck. Morgan had his wife, residing in the Philippines, open an account in her name so that the Afghan could wire the money to it. Morgan and his wife used the money, totaling $10,000, during a rest and relaxation period in the Philippines. The loss the U.S. government occasioned by the conspiracy was approximately $37,300.

Major General Abdul Wase Raoufi Conviction
Afghan Major General Convicted for Bribery

 In late August 2016, SIGAR received information relating to allegations of bid rigging and collusion involving owners of fuel and logistics companies and Ministry of Interior (MOI) Major General Abdul Wase Raoufi. The bid rigging was related to the MOI fuel-procurement bidding process. At the time, Raoufi chaired the Fuel Evaluation Committee that oversaw MOI’s fuel bidding and procurement process.

 SIGAR initiated an investigation into these allegations in cooperation with the Afghan Major Crimes Task Force (MCTF). The MCTF is an elite investigative body which investigates high-level corruption cases. Working jointly with SIGAR, the MCTF investigation revealed that Raoufi and MOI officers used their influence in the bidding process to collect bribes from the qualified bidding vendors of $100,000–150,000 for each of the seven zone fuel lots in the MOI fuel contracts.

 The MCTF initiated an undercover sting operation in conjunction with and under authority of prosecutors of the Afghan Attorney General’s Office (AGO) assigned to the MCTF.

 On the evening of September 27, 2016, the MCTF established a surveillance of an undercover meeting at Raoufi’s home in Kabul, Afghanistan. During the meeting, Raoufi solicited a $150,000 bribe from an MCTF undercover agent for the award of one lot on the MOI fuel contract. Raoufi also implicated 16 other MOI officers in the bribery scheme during the meeting.

 On September 29, 2016, the MCTF undercover agent again met with Raoufi. The MCTF officer paid a $150,000 cash bribe to Raoufi, who was then arrested by members of the MCTF and AGO.

 On January 9, 2017, Raoufi was found guilty of accepting a $150,000 bribe in exchange for awarding a fuel contract. The trial was held at the newly established Anti-Corruption Justice Center (ACJC). Raoufi was sentenced to 14 years in jail and fined $150,000. He was also fined 18,000 Afghanis for forging documents regarding an armored vehicle he was using. He was allowed 20 days to appeal the verdict.

 The Court also issued summonses for six other MOI officials as part of this continuing investigation. SIGAR will continue to work jointly with its partners at the MCTF, ACJC, and the AGO to fight waste, fraud, and abuse of U.S. reconstruction funds in Afghanistan.


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