Pentagon Paid Nearly $1,000,000 To Ship Two 19-Cent Washers
The good news is...it was caught and the distributors face jail time. A summary of what happened, the washers were priority and priority orders don't have oversight so they are paid automatically. After the Pentagon later reviewed the orders, they haul distributors into court. They were charged and convicted of wire fraud and money laundering. I think treason should've been added.
A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to an Army base in Texas, U.S. officials said.
The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.
The owners of C&D Distributors in Lexington, South Carolina -- twin sisters -- exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled "priority'' were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.
C&D and two of its officials were barred in December from receiving federal contracts. Today, a federal judge in Columbia, South Carolina, accepted the guilty plea of the company and one sister, Charlene Corley, to one count of conspiracy to commit wire fraud and one count of conspiracy to launder money, Assistant U.S. Attorney Kevin McDonald said.
Corley, 46, was fined $750,000. She faces a maximum prison sentence of 20 years on each count and will be sentenced soon, McDonald said in a telephone interview from Columbia. Stroot said her sibling died last year.
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The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said.
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"C&D was a rogue contractor,'' Stroot said. While other questionable billing has been uncovered, nothing came close to C&D's, she said. The next-highest billing for questionable costs totaled $2 million, she said.
Stroot said the Pentagon hopes to recoup most of the $20.5 million by auctioning homes, beach property, jewelry and "high- end automobiles'' that the sisters spent the money on.
