Navy Military Sealift Command Contractor Pleads Guilty to Bribery and Conspiracy

FRAUD

Bribery and Conspiracy

NORFOLK, VA. — Scott B. Miserendino, Sr., 55, a former contractor for the United States Navy Military Sealift Command, pleaded guilty Tuesday to accepting bribes and conspiring to commit bribery.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Dana J. Boente of the Eastern District of Virginia, Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office, Special Agent in Charge Susan Triesch of the Naval Criminal Investigative Service (NCIS) Norfolk Field Office, and Special Agent in Charge Royce E. Curtin of the FBI Norfolk Field Office made the announcement today after Miserendino entered his guilty plea before U.S. Magistrate Judge Douglas E. Miller of the Eastern District of Virginia.

According to a statement of facts filed with the plea agreement, Miserendino was a government contractor at the Military Sealift Command, which is the leading provider of transportation for the U.S. Navy.    In that position, Miserendino worked closely with Kenny E. Toy, the former Afloat Programs Manager for the N6 Command, Control, Communication, and Computer Systems Directorate.    In approximately November 2004, Miserendino and Toy initiated an extensive bribery scheme that spanned five years, involved multiple coconspirators, including two companies, and resulted in Miserendino and Toy receiving more than $265,000 in cash bribes, among other things of value, in exchange for official assistance.

The port at Norfolk, Virginia. THE CHESAPEAKE TODAY photo

The port at Norfolk, Virginia. THE CHESAPEAKE TODAY photo

At his plea hearing, Miserendino admitted that he solicited and accepted regular cash bribes, as well as other things of value, from two Chesapeake, Virginia contracting companies, referred to as Company A and Company B in court documents, in exchange for providing favorable treatment to those companies in connection with U.S. government contract work.    More specifically, Miserendino admitted that he accepted $3,000 in cash bribes per month from various employees at Company A, including co-conspirators Dwayne A. Hardman, Roderic J. Smith, Michael P. McPhail, and Adam C. White.    Miserendino also admitted that he, along with Toy, accepted a cash bribe payment of $50,000 in May 2009, from Company B’s founders, Hardman and Timothy S. Miller.

In addition to the more than $265,000 in cash bribes, Miserendino also admitted that he and Toy received other things of value, including flat screen televisions, laptop computers, a vacation rental in Nags Head, North Carolina, a football helmet signed by Troy Aikman, and softball bats.

According to plea documents, in exchange for the bribes, Miserendino and Toy performed various official acts to assist Company A and Company B.    Indeed, during the conspiracy, Company A received approximately $3 million in business from the Military Sealift Command and Company B received approximately $2.5 million in business.

As part of his guilty plea, Miserendino also admitted to engaging in a scheme to conceal his criminal activity, which involved Miserendino arranging for more than $85,000 to be paid to one of his co-conspirators, Hardman, in an attempt to prevent Hardman from reporting the bribery scheme to law enforcement authorities.

Miserendino is scheduled to be sentenced on November 7, 2014.

Earlier this year, five other individuals pleaded guilty in connection with the bribery scheme.    On Feb. 12, 2014, Toy pleaded guilty to bribery, and he was sentenced on July 29, 2014, to 96 months in prison and ordered to forfeit $100,000.    On Feb. 18, 2014, Hardman, the co-founder of Company A and Company B, pleaded guilty to bribing Toy and Miserendino, and he was sentenced on July 9, 2014, to 96 months in prison and ordered to forfeit $144,000.    On Feb. 19, 2014, Michael P. McPhail pleaded guilty to conspiracy to commit bribery, and he was sentenced on Aug. 5, 2014, to 36 months in prison and ordered to forfeit $57,000.    On March 5, 2014, Smith, the co-founder and former president of Company A, pleaded guilty to conspiracy to commit bribery, and he was sentenced on June 23, 2014, to 48 months in prison and ordered to forfeit $175,000.    On April 4, 2014, White, a former vice president of Company A, pleaded guilty to conspiracy to commit bribery, and he was sentenced on July 11, 2014, to 24 months in prison and ordered to forfeit $57,000.

The remaining defendant, Timothy S. Miller, a businessman who sought contracting business from the Military Sealift Command, is charged with one count of conspiracy to commit bribery and two counts of bribery.

Miller’s trial is scheduled for Sept. 30, 2014, before Chief Judge Smith.

The case was investigated by the FBI, NCIS, and DCIS.    The case was prosecuted by Trial Attorney Emily Rae Woods of the Criminal Division’s Public Integrity Section and Assistant U.S. Attorney Stephen W. Haynie of the Eastern District of Virginia.

THE DEVIL MADE THEM DO IT…

This story from the Virginian-Pilot Online reveals the name of the company which Hardman co-founded…and states that Hardman and his co-conspirators thought dealing in bribes was the only way to do business with the government…

As head of a Chesapeake defense contracting firm, Roderic Smith thought he had to “pay to play.” He thought bribery was all part of the government contracting game.

“The pattern and amounts of payments were very formulaic and routine,” his lawyers said in a court filing. The scheme “was a scheduled system to provide continuous access to compete and win contracts.”

Smith would learn that this was not routine, but when he tried to get out, he was extorted by a co-defendant to stay in. It went on for more than eight years before federal authorities stopped it.

Smith, 50, admitted that what he did was wrong and on Monday was sentenced to four years in federal prison.

“I wish I made the right decision so none of us would be here today,” Smith said to U.S. District Judge Henry Coke Morgan Jr., as Smith’s family looked on.

The scheme began in 2005, shortly after Smith and a business partner, Dwayne Hardman, formed a Chesapeake company called Mid-Atlantic Engineering Technical Services, which specialized in telecommunications work.

The government says Smith and Hardman “masterminded” the bribery scheme when they approached two high-level contracting specialists with the Navy’s Military Sealift Command, Kenny Toy and Scott Miserendino, looking for work.

But Smith says Toy was the one who demanded money from him and Hardman in return for contracts from the command.

“Regrettably, we agreed to do it,” said Smith, who is from Ebony, near Lake Gaston.

After getting paid, the attorneys said, Toy and Miserendino would tell Hardman and Smith how much to bid on contracts they wanted. Smith’s company received $3 million in work as a result. Toy and Miserendino received about $265,000 from Smith, Hardman and others involved, court records say …..MORE

Co-conspirator Miller was a major contributor to youth sports and target of a murder-for-hire scheme

From Virginian-Pilot

NORFOLK

Timothy S. Miller CEO of ACS Systems and Engineering  photo courtesy of Virginian-Pilot by Charlie Meads

Timothy S. Miller CEO of ACS Systems and Engineering photo courtesy of Virginian-Pilot by Charlie Meads

The founder of a defunct Chesapeake technology company, who has given millions to charity and was once the target of a murder-for-hire plot, appeared in federal court Tuesday on charges of bribing government officials in exchange for lucrative contracts.

Timothy S. Miller, one-time CEO of ACS Systems and Engineering, was released after posting a $10,000 unsecured bond. He was indicted Friday on one count of conspiracy to bribe a public official and two counts of bribery.

Miller, 57, of Fordsmere Court, Chesapeake, is accused of paying $50,000 in bribes to contractors with the Military Sealift Command in exchange for more than $1.1 million in contracts. …..MORE

 

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