Wednesday, December 09, 2009

Corruption: Former U.S. Army officer sentenced in yet another Iraq corruption and money laundering scandal

Curtis Whiteford, a former colonel in the U.S. Army Reserves, was sentenced to five years in prison for his participation in a wide-ranging bribery conspiracy in Al-Hillah, Iraq, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division. U.S. District Court Judge Mary L. Cooper for the District of New Jersey, Trenton Division, also ordered Whiteford to pay $16,200 in restitution and to serve two years of supervised release following his prison term.

Whiteford, 53, of Deweyville, Utah, was charged in a 25-count indictment unsealed on Feb. 7, 2007, along with former U.S. Army Lt. Col. Debra M. Harrison, former U.S. Army Reserves Lt. Col. Michael Wheeler, and civilians William Driver and Seymour Morris Jr., with various crimes related to a scheme to defraud the Coalition Provisional Authority-South Central Region (CPA-SC). Whiteford was the second-most senior official and highest ranking military officer at CPA-SC in Al-Hillah.

A federal jury convicted Whiteford and Wheeler on Nov. 7, 2008. Whiteford was convicted of conspiracy to commit bribery and the interstate transport of stolen property (ITSP). Wheeler was convicted of conspiracy to commit bribery, honest services wire fraud, ITSP and possessing unregistered firearms. Wheeler will be sentenced at a later date. Harrison pleaded guilty on July 28, 2008, to one count of honest services wire fraud for her role in the scheme. Driver pleaded guilty on Aug. 5, 2009, to laundering portions of more than $300,000 stolen from the CPA-SC by Harrison, his wife, and is scheduled to be sentenced on Dec. 10, 2009. Morris was acquitted at trial.

According to testimony at trial, Whiteford and Wheeler conspired from December 2003 to December 2005 with at least three others--Robert Stein, at the time the comptroller and funding officer for the CPA-SC; Philip H. Bloom, a U.S. citizen who owned and operated several companies in Iraq and Romania; and U.S. Army Lt. Col. Bruce D. Hopfengardner--to rig the bids on contracts being awarded by the CPA-SC so that more than 20 contracts were awarded to Bloom. In total, Bloom received approximately $8 million in rigged contracts. Testimony revealed that Bloom, in return, provided Whiteford, Harrison, Wheeler, Stein, Hopfengardner and others with more than $1 million in cash, SUVs, sports cars, a motorcycle, jewelry, computers, business class airline tickets, liquor, promise of future employment with Bloom and other items of value.

Bloom admitted he laundered more than $2 million in currency that Whiteford, Harrison, Wheeler, Hopfengardner, Stein and others stole from the CPA-SC that had been designated for the reconstruction of Iraq. Bloom then used his foreign bank accounts in Iraq, Romania and Switzerland to send some of the stolen money to Harrison, Stein, Hopfengardner and other Army officials in return for them awarding contracts to Bloom and his companies.

On Jan. 29, 2007, co-conspirator Robert Stein was sentenced to nine years in prison for related charges of conspiracy, bribery and money laundering, as well as weapons possession charges, for his role in the same scheme. Stein was also ordered to forfeit $3.6 million for his role in the bribery and money laundering scheme.

On Feb. 16, 2007, co-conspirator Philip Bloom was sentenced to 46 months in prison for related charges of conspiracy, bribery and money laundering for his role in the scheme. Bloom was also ordered to forfeit $3.6 million for his role in the bribery and money laundering scheme.

On June 25, 2007, Lt. Col. Bruce Hopfengardner was sentenced to 21 months in prison for conspiracy and money laundering related to this scheme. Hopfengardner was also ordered to forfeit $144,500.

These cases are being prosecuted by Trial Attorneys John P. Pearson and Kevin Driscoll of the Criminal Division's Public Integrity Section, as well as Trial Attorney Ann C. Brickley. The cases are being investigated by the Internal Revenue Service-Criminal Investigation, the Special Inspector General for Iraq Reconstruction, U.S. Immigration and Customs Enforcement and the FBI-Washington Field Office.

SOURCE U.S. Department of Justice

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