Justice Department alleges kickback scheme tied to Iraq munitions disposal contracts
The Huntsville Times March 13, 2012
HUNTSVILLE, Alabama — A series of multi-million contracts for munitions disposal in Iraq were used in a kickback scheme worth more than $1 million, and three men now face criminal charges, according to the U.S. Attorney’s Office in Birmingham.
The scheme involved employees of an unnamed California-based prime contractor, awarding Iraq reconstruction work to subcontractors in exchange for payments, the Justice Department alleges.
The original contracts were issued as part of the Coalition Munitions Clearance Program, which is operated in Iraq by the U.S. Army Corps of Engineers, Huntsville Engineering and Support Center, according to the Justice Department’s news release.
The Huntsville Engineering and Support’s operated the program to clear out, store and dispose of weapons that were seized or abandoned in Iraq since the 2003 invasion, the Justice Department said.
The HESC awarded a contract to perform this work to an international engineering and construction firm based in Pasadena, Calif.
Two employees of that company, Billy Joe Hunt, 57, of Athens and Gaines Newell, 52, of Richton, Miss., are charged with conspiracy in connection with kickbacks, wire fraud and mail fraud, and with filing false tax returns.
Both men have entered pleas by information and were not indicted.
Those pleas contend both men were involved in soliciting and receiving a total of more than $1 million in kickbacks.
A United Kingdom national, Ahmed Sarchil Kazzaz and his company, Leadstay Co., also face multiple charges. Kazzaz paid more than $947,500 in unlawful kickbacks to win lucrative subcontracts for himself and Leadstay in connection with the Coalition Munitions Clearance Program, the Justice Department said.
Kazzaz and Leadstay face one count of conspiracy to defraud and commit offenses against the United States; six counts of unlawful kickbacks; one count of wire fraud; and three counts of mail fraud. Kazzaz was arrested on Feb. 14, 2012, in Los Angeles.
“Government contracts fraud is an insult to all law-abiding taxpayers,” said Northern District of Alabama U.S. Attorney Joyce White Vance. “These defendants’ conduct was even worse in that they tried to illegally profit from defense contracts in Iraq, where American men and women were willing to put their lives on the line for freedom.”
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