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.