Contractor Pleads Guilty In Case Involving Bribery, FraudAnd Money Laundering Scheme in Al-Hillah, Iraq

21 April 2006

Philip Bloom, a U.S. citizen who resided in Romania and Iraq, has pleaded guilty to conspiracy, bribery and money laundering in connection with a scheme to defraud the Coalition Provisional Authority - South Central Region (CPA-SC) in Al-Hillah, Iraq, the Department of Justice and the Special Inspector General for Iraq Reconstruction announced today.

The plea agreement and an accompanying criminal information were filed under seal and unsealed today at U.S. District Court in the District of Columbia. As part of the plea, accepted before U.S. District Judge Colleen Kollar-Kotelly on March 10, 2006, Bloom admitted that from December 2003 through December 2005, he and Robert Stein, the CPA-SC's comptroller and funding officer - along with other public officials, including several U.S. Army officers - conspired to rig the bids on federally- funded contracts being awarded by the CPA-SC so that all of the contracts were awarded to Bloom. The total value of the contracts awarded to Bloom exceeded $8.6 million. Bloom admitted paying Stein and other public officials more than $2 million in money and gifts in return for them using their official positions to award contracts to Bloom and his companies. Bloom, Stein, and others also facilitated numerous wire transfers of money that were the proceeds of the fraudulently awarded bids and at least $2 million in stolen money from the CPA, in order to conceal the source and origin of the funds.

"In his guilty plea, Philip Bloom admits offering millions in bribes so that he and his companies could receive contracts for the vital task of rebuilding Iraq," said Assistant Attorney General Alice S. Fisher of the Criminal Division. "The reconstruction effort in Iraq must be free from the taint of corruption, and we will continue to pursue these cases to the fullest extent of the law."

"Dedicated oversight of Iraq reconstruction ensured that the crimes of Philip Bloom were detected and punished. Oversight works," said Stuart W. Bowen, Jr., Special Inspector General for Iraq Reconstruction.

Bloom faces up to 40 years in prison, a five-year term of supervised release, and a fine of $750,000. Under the terms of his plea agreement, he must pay $3.6 million in restitution and forfeit $3.6 million in assets to the United States.

Others arrested and charged in connection with this investigation include:

Stein, who pleaded guilty Feb. 2, 2006, to conspiracy, bribery, money laundering, possession of machine guns and being a felon in possession of a firearm, in connection with the scheme to defraud the CPA. Stein also admitted to facilitating the purchase and possession of at least 50 weapons including machine guns, silencers and grenade launchers with misappropriated CPA funds. Stein, a convicted felon, remains in custody.

Michael Wheeler of Amherst Junction, Wis., a lieutenant colonel in the U.S. Army Reserves. Wheeler was arrested Nov. 30, 2005, on a criminal complaint charging him with conspiring to commit bribery, money laundering, possession of automatic weapons, theft and wire fraud. He is presently released on bond.

Debra Harrison of Trenton, N.J., also a lieutenant colonel in the U.S. Army Reserves, was arrested Dec. 15, 2005 on a criminal complaint charging her with conspiracy, bribery, interstate transportation of stolen property and money laundering. She is presently released on bond.

These cases are being prosecuted by Criminal Division Trial Attorneys James A. Crowell IV and Ann C. Brickley of the Public Integrity Section, and Trial Attorneys Mark J. Yost and Patrick Murphy of the Asset Forfeiture and Money Laundering Section. These cases are being investigated by Special Inspector General for Iraq Reconstruction, Internal Revenue Service Criminal Investigation, U.S. Immigration and Customs Enforcement, Federal Bureau of Investigation, and the U.S. Department of State Office of Inspector General.

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Source: usnewswire

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