DLALM Employees Honored For Efforts In Long-Running Fraud Case by Kristin Molinaro, Defense Logistics Agency Land and Maritime
September , 2021
The Department of Defense Office of
Inspector General’s Defense Criminal Investigative Service honored
two Defense Logistics Agency Land and Maritime employees recently
for their efforts in tracking a decades-long scheme by New Orleans
businessman Robert Klein to defraud the Department of Defense of
millions of dollars.
Two members of the DLA Land and
Maritime Counterfeit Material and Unauthorized Product Substitution
Team received plaques on behalf of DCIS during a gathering at the
U.S. Attorney’s Office for the Southern District of Ohio. Due to the
sensitive work involved, they have asked not to be named.
September 21, 2021 - The Department of Defense Office of the Inspector General's Defense Criminal Investigative Service honored several members of the team involved in the arrest and conviction of the New Orleans businessman responsible for a decades-long scheme to provide fraudulent parts to the DOD. Pictured left to right: Internal Revenue Service Agent Della Blunk, Assistant U.S. Attorney with the Southern District of Ohio Jessica Knight, DCIS Resident Agent in Charge and Case Lead Jared Camper and Defense Logistics Agency Land and Maritime Associates Dave Loughman and Carol Matheke. Loughman worked in the Product Verification Program Division and Matheke is an assistant fraud counsel. (Defense Logistics Agency Land and Maritime photo by Shannon Mormon)
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The effort to hold Klein accountable was a
partnership between DLA Land and Maritime, DCIS, the Internal
Revenue Service and the U.S. Attorney’s Office, who prosecuted the
case.
Klein pled guilty last November to one count of wire
fraud, three counts of money laundering and one count of tax evasion
in his plot to fraudulently obtain government contracts and provide
defective replacement parts for military weapons systems. As part of
his plea agreement, Klein was sentenced to three years of home
detention and agreed to pay more than $2.2 million in restitution to
DOD and the IRS.
A
CM/UPS Team member initially referred the case to DCIS in 2003, when
Klein’s company delivered nonconforming parts on a DLA contract. The
company and its principals were debarred from conducting business
with DLA, only for Klein to start a new company under a different
name to disguise the true owner. This continued for several years,
with DLA debarring a total of 19 companies controlled by Klein
through the efforts of the CM/UPS Team detecting suspicious activity
on DLA contracts.
“What sticks out to me was how blatant it
was and how persistent and long lasting it was,” said DCIS Acting
Resident in Charge Jared Camper, who served as the Klein case’s lead
investigator. “DLA would catch him, the CM/UPS Team would recommend
debarment of his companies, and then he would go find more people,
use their identification and start new companies.”
The lack
of technology accessible at the time complicated efforts to track
Klein, who’s initial fraudulent activity can be traced back to 1997.
Assistant U.S. Attorney for the Southern District of Ohio
Jessica Knight, a prosecutor on the case, explained, “There are
things we can do now that weren’t available back then…and as
technology caught up, we were able to use other techniques to say
‘’Yes, this all points back to him.’”
The CM/UPS Team
methodically tracked the case while continuing to advocate for
investigation and prosecution, and its efforts paid off when Klein
was arrested in September of 2019. The team then assisted the case’s
prosecutors by providing case files gathered on the fraudulent
companies.
A quality assurance specialist on the CM/UPS Team
was responsible for identifying the fraudulent parts. DCIS
investigators relied on his proactiveness as well as his
relationships with industry in researching and identifying
nonconforming parts.
“We in the U.S. Attorney’s Office work
shoulder-to-shoulder every day with our law enforcement partners
collectively doing a lot of good work – most done without fanfare or
recognition – and from time to time it makes sense to step back and
acknowledge good partnerships and good results,” said Brian
Martinez, a deputy criminal chief with the U.S. Attorney’s Office
for the Southern District of Ohio.
Awards were presented to
the DLA Land and Maritime CM/UPS Team, Knight, IRS agent Della Blunk
and Special Assistant U.S. Attorney J. Michael Marous.
“This
team did something that other teams around the country were not able
to do – which was to hold someone accountable who had been
defrauding the American people, defrauding the Department of
Defense, and putting our men and women in uniform in harm’s way,”
Martinez said.
The interdisciplinary CM/UPS Team chaired by
DLA Land and Maritime fraud attorneys works hand in hand with
acquisition professionals, product testing centers, engineering and
technical quality experts, the U.S. Attorney’s Office and DCIS to
identify, investigate and interdict fraud or suspected fraudulent
contractors.
“The CM/UPS team coordinates the tools of
contracting, business integrity and law enforcement to protect the
supply chain, advises contracting officers and pursues remedies, and
by that we support investigating agencies to prosecute, and we also
pursue administrative suspensions and debarments,” DLA Land and
Maritime Chief Counsel Mike Gordon said.
DCIS Special Agent
in Charge Patrick Hegarty said the CM/UPS Team working group is a
model for his organization. Hegarty oversees the northeast field
office which includes Ohio and Michigan and traveled to present the
awards to the team.
He credited the CM/UPS Team for its
dedication in linking the pieces together of Klein’s fraud and
providing DCIS agents with details they needed leading to his
successful arrest. Likewise, he thanked the team for its expert
analysis and identification of nonconforming material.
“DCIS
was formed in 1982, and procurement fraud and product substitution
is what we did right out of the gate,” he explained. “Taskforces,
working groups, initiatives – they come and go – but the longevity
of this one is remarkable. We’re in working groups across the
country but it’s really nice to be on a DOD-focused working group
and this is a great example of DLA caring about the parts.”
Closing out the award presentation, DLA Land and Maritime Deputy
Commander Kenneth Watson thanked DCIS and the U.S. Attorney’s Office
for their partnership with DLA and credited the CM/UPS Team as a
labor of love.
“We all feel passionate about the Warfighter
we support each and every day and the harm that these criminals are
doing in violating the trust of our supply chain and products we put
out there,” Watson said. “It takes a team and it’s really heartening
for us to know that a lot of the hard work and effort that we put
into this is really shared by all of us in this room. Persistence
paid off and we’re going to keep it up. Our hope is that what we do
in Columbus becomes a hallmark for the agency in how we’re
mitigating supply chain risk and really getting after some of these
serious bad actors. Thank you for recognizing it and being such a
good partner in all of this.”
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