US contractor pleads guilty to $1.4m military fraud

A contractor in the US faces a lengthy prison sentence after pleading guilty to defrauding the federal government of up to $1.4m at a federal court in Newark, New Jersey this week.

James Conway, 45, pleaded guilty to one count of wire fraud and one count of accepting unlawful kickbacks.

The wire fraud charge carries a maximum penalty of 20 years and the bribery charge a maximum penalty of 10. Both charges may impose a maximum fine of $250,000 or twice the gross gain or loss associated with the offense, whichever is greater.

Conway was released on a $250,000 bond and will be sentenced on 30 November.

The Pennsylvanian contractor was employed as a regional manager for a company that was undertaking construction projects at two military bases, Picatinny Arsenal and Fort Dix. According to papers filed in the case, from September 2009 to August 2015 he steered subcontracts to a company called Walsh Construction Services, which he secretly owned.

To conceal his involvement, Conway signed the subcontracts as "Keith Walsh", the purported owner of the firm.

Conway used Walsh Construction to obtain payments from the contractor by submitting invoices and bills on behalf of it, including charges for work that Walsh Construction did not carry out, or did so only partially, thereby causing the $1.4m loss.

Conway also accepted kickbacks totalling $180,345, from four subcontractors in return for favourable treatment.

Conway was arrested following an investigation by the FBI and the US Army Major Procurement Fraud Unit.   

Image: Fort Dix, New Jersey (Military Bases)

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