Larayne Whitehead revealed how easy it is to scam Uncle Sam; FBI showed that they can nab crooks

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Clinton Woman Sentenced in $2.3 Million Government Contract Fraud Scheme

Pinched police note arrestsGREENBELT, MD—U.S. District Judge Paul W. Grimm sentenced Larayne Whitehead, age 35, of Clinton, Maryland, today to 18 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with a scheme to defraud businesses which supplied goods under government contracts. Judge Williams also entered an order that Whitehead forfeit $2,393,579 and a car.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.

According to her plea agreement, from December 2007 to May 2013, Whitehead and her co-conspirators used at least 15 businesses in Maryland, Delaware, Georgia, Nevada, North Carolina and Tennessee which they incorporated to bid on contracts to provide goods—such as books, snowmobiles, plants and paint—to government agencies.

Most of the contracts were awarded using an online marketplace to compete for federal contracts. The conspirators often submitted extremely low bids to secure the contracts. Once awarded the contracts, Whitehead enticed victim businesses to supply the goods required by contract and promised to pay these subcontractors after the government paid Whitehead. Whitehead, however, fraudulently retained the government payments for her own personal benefit and did not pay the subcontractors.

The conspirators typically operated under a particular business name for six to 12 months until the business was either disqualified from the online marketplace or was otherwise burdened with lawsuits or liens. The conspirators then continued the scheme under a newly-registered business name.

As a result of the scheme, Whitehead and co-conspirator Christopher Johnson received at least 144 bank deposits from governmental agencies totaling approximately $2,321,058.95 which was reasonably foreseeable to Whitehead. The scheme involved between 50 and 250 business victims.

In addition, on June 28, July 16 and August 10, 2010, Whitehead submitted duplicate charges to a government credit card that the Department of Homeland Security had provided to her to pay for goods provided pursuant to a government contract. The resulting loss to the federal government was $39,983.16.

Christopher Johnson, age 36, of Clinton, Maryland previously pleaded guilty to his participation in the scheme. Johnson was sentenced on July 21, 2014 to 18 months in prison and ordered to pay restitution of $426,376.99.

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force—chaired by Assistant Attorney General for the Criminal Division Lanny A. Breuer—includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrate the Department of Justice=s commitment to helping ensure the integrity of the government procurement process.

United States Attorney Rod J. Rosenstein praised the FBI for its work in the investigation and thanked Assistant U.S. Attorney Bryan E. Foreman, who prosecuted the case.

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