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Government Contractor Pleads Guilty to Defrauding the Afghan Government of $100 Million

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DOJ Developments

Government Contractor Pleads Guilty to Defrauding the Afghan Government of $100 Million

The owner of Assist Consultants Incorporated (ACI), an Afghan company that has received over $250 million in US-funded contracts since 2013, pleaded guilty to wire fraud for his role in an alleged scheme to defraud the government of Afghanistan of over $100 million. These funds were provided to Afghanistan by the U.S. Agency for International Development (USAID) for the purpose of constructing an electric grid in the country.

According to court documents, in July 2015, ACI submitted a bid to Afghanistan’s national power utility, Da’ Afghanistan Breshna Sherkat (DABS), for the construction of five electric power substations. In order to meet the requirement that bidders must have substantial experience building electric power substations, ACI falsely represented that it worked as a subcontractor to a prime contractor on two power stations in Uganda and Nigeria. In reality, the alleged prime contractor was a fictitious entity that was actually invented and controlled by ACI, and ACI never built any substation in Africa. Following DABS’ request for supporting documentation in February 2016, the defendant allegedly directed two co-conspirators to travel to Uganda and Nigeria to obtain false documents to respond to the request.  The defendant ultimately submitted a purported subcontractor agreement, false bank records, and a false letter from a Ugandan government official.

The defendant’s sentencing date has not yet been scheduled. He faces a maximum penalty of 20 years in prison.

The DOJ press release can be found here.

Former Member of Parliament of Barbados Sentenced to Two Years Imprisonment

Donville Inniss, a former Minister of Industry and member of the Parliament of Barbados, was sentenced to 24 months in prison for laundering bribes he received from the Insurance Corporation of Barbados Limited (ICBL) through banks located on Long Island, New York.

According to the DOJ, Inniss accepted about $36,000 in bribes from senior executives of ICBL and attempted to conceal the payments, which were falsely labeled as payments for consulting services, through a bank account belonging to a friend’s New York-based dental company. In exchange for bribes, Inniss used his position as Minister of Industry, International Business, Commerce, and Small Business Development to allow ICBL to obtain two contracts from the Barbados government to insure $100 million worth of government property.

Inniss was convicted following a one-week trial in January 2020. In addition to imprisonment, he was ordered to pay $36,536.73 in forfeiture.

The DOJ press release can be found here.

Florida Investment Advisor Charged With $40 Million Securities Fraud

A Florida investment advisor was charged with securities and wire fraud for his alleged role in a scheme to fraudulently induce more than 100 investors to invest about $40 million into his fund by making misrepresentations regarding the fund’s investment strategy, liquidity, and performance. The defendant is also facing a parallel civil action brought by the SEC.

According to the indictment, the defendant represented that he would be trading in preferred securities and options markets that would provide investors with quarterly liquidity and that his investment fund had enjoyed positive returns since August 2010. In reality, he diverted the fund’s capital to risky and illiquid investments such as private start-ups, real estate ventures, and early-stage companies, many of which were started by the defendant’s associates. The defendant used some of the fund’s assets on personal expenses, such as the purchase of an airplane hangar to store his car collection. The defendant also made misrepresentations regarding the performance of the fund, and falsely stated that it would be audited by an independent accounting firm on an annual basis.

The fund is currently being liquidated after being unable to fulfill redemption requests in 2019. If convicted, the defendant faces a maximum of 20 years imprisonment. 

A copy of the criminal indictment can be found here.

New Jersey Man Charged with Tax Evasion and Failure to File Tax Returns

A New Jersey man employed as a mechanic by a company managing port operations in New Jersey was charged with one count of tax evasion and five counts of willful failure to file income tax returns for failing to file tax returns for 2014-2018. According to the indictment, the defendant earned over $1.6 million between 2014 and 2018 but claimed in an IRS Form W-4 that he was exempt from federal income tax withholding. The defendant faces a maximum of five years imprisonment for tax evasion, and one year for each count of willful failure to file tax returns.

The DOJ press release can be found here.

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