Two Contractor Firms, Third Individual Also Charged

Officials with the US Department of Justice tell ANN two defense contractors were arrested in New York City on January 6, and charged with conspiring to steal information relating to US Department of Defense (DOD) contracts to supply fuel to DOD aircraft worldwide. Two contractor firms and a third individual are also charged with participating in the conspiracies.

In a three-count indictment returned on December 5, 2007, and unsealed Monday in US District Court in Baltimore, Christopher Cartwright and Paul Wilkinson were charged for their roles in the conspiracies. Along with Cartwright and Wilkinson, two affiliated companies -- Prague, Czech Republic-based Far East Russia Aircraft Services Inc. (FERAS) and the Isle of Man-based Aerocontrol LTD -- were also charged in the indictment.

FERAS also has an office in Houston. Cartwright and Wilkinson are US citizens who have been living in Prague. A separate charge was filed in US District Court in Baltimore against a third individual, Matthew Bittenbender, alleging the same criminal conduct. Bittenbender resides in Baltimore.

The Department said the conspiracies took place from about February 2005 to about July 2006. "These cases demonstrate that we will aggressively investigate and prosecute those who attempt to derail the efforts of the Department of Defense to obtain essential goods and services, such as aviation fuel, at competitive prices," said Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust Division.

According to the indictment, Cartwright, Wilkinson, FERAS and Aerocontrol conspired with Bittenbender to defraud the United States, commit wire fraud and steal trade secrets. Bittenbender was a former senior contract fuel manager at Avcard, a division of Kropp Holdings LLC, a Hunt Valley, MD company which provides fuel and fuel services to commercial and government aircraft. Bittenbender is charged with taking confidential bid data and other proprietary information related to fuel supply contracts with DOD from Avcard, and selling that information to competitors Cartwright, Wilkinson, FERAS and Aerocontrol.

In return, Bittenbender allegedly received cash payments and a percentage of the profit earned on the resulting fuel supply contracts awarded by DOD. According to the charges, Cartwright, Wilkinson, FERAS and Aerocontrol subsequently used that illegally obtained information to bid against Avcard at every location where the companies were bidding head-to-head, thereby subverting DOD's competitive bidding procedures for fuel supply contracts.

Ultimately, the indictment alleges, Avcard lost each of the contested bids, and DOD was deprived of its right to competitive bids.

Aviation fuel is obtained by the DOD through the Defense Energy Support Center (DESC) which lets contracts for a variety of products including aviation fuel. Aviation fuel procured by the DESC is delivered worldwide to locations, including Croatia, Bulgaria, and Bagram, Afghanistan.

A violation of defrauding the United States carries a maximum sentence of five years of imprisonment and a fine of $250,000 for an individual, and a fine of $500,000 for a corporation. A violation of conspiracy to commit wire fraud carries a maximum sentence of 20 years of imprisonment and a fine of $250,000 for an individual, and a fine of $500,000 for a corporation. A violation of conspiring to steal trade secrets carries a maximum sentence of 10 years of imprisonment and a fine of $250,000 for an individual, and a fine of $5 million for a corporation.

The maximum fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

FMI: www.usdoj.gov/