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Pentagon Notices Million Dollar Bill For Shipping 38 Cent Item

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Bloomberg.com reported today the story of a supplier of parts to the Pentagon billed them $998,798 to send two washers with a value of 38 cents to an Army installation in Texas, the tip of the iceberg in a Pentagon over-billing scam totalling over $20 million.

The two sisters who owned the company and lived ostentatiously on their criminal activities discovered a loophole in the Pentagon’s shipping system. Supplies to combat areas and military installations that had been labeled “priority” were paid automatically. Charlene Corley is the surviving sister and owner of C&D Distributors of Lexington, SC. She is being fined only $750,000 and “faces” 20 years on each count of an indictment for conspiracy to commit wire fraud and conspiracy to launder money. The government is hoping to recoup some of its $20.5 million by selling off “homes, beach property, jewelry and ‘high-end automobiles”. It cannot recover the money from their vactions — a pentagon spokesperson said, “They took a lot of vacations.”

C&D charged the pentagon $455,009 for 3 screws (value:$3.93) to Marines in Habbaniyah, Iraq. They were paid automatically. They billed and received $293.451 for the shipment of a washer to Patrick AFB in Florida. It was worth 89 cents.

The southern sisters began the scam in the year 2000. They got more and more greedy as time went on. The price for each shipped item was seldom more than $100. During six years of continuing fraudulent activities the total reeal value of items shipped was $68,000. They billed and were paid $20.5 million by the accomodating procurement system.

In September of 2006 a purchasing agent (Bloomberg did not report whether the agent was rewarded or promoted for diligence and honesty) noticed a bill for sending two additional washers (value: 38 cents) for $969,000. The agent rejected the bill and found the earlier $998,798 payment to the South Carolina women.

A spokesperson for the Pentagon’s Defense Logistics Agency, Dawn Darden, said that the government raced to look at “all billing records…” and that this kind of fraud is “…not a widespread problem.” They have found some other “questionable billing,” but that the Carolina company’s total take stood out by a large margin. For something that is denigrated as “not wide-spread”, they noted that the “next-highest billing for questionable costs totaled $2 million.” A pittance.

Bloomberg understands money. Take this $20.5 million, that $2 million, add up the rest of the fraud and corruption and what would you have? For those of you dealing with the high cost of living in a nation embroiled in a war against evil attackers, a credit crisis (could fraud be a part of that, too?) this example of federal effectiveness will be reassuring.

Those looking for a new business should consider a shipping service directed at the military. Get a UPS and FedX account and a lot of Express Mail envelopes (they are free) and keep the bill in the range of “negligible” — under $2 million. Let the troops support you.

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About hfdratch

  • http://www.elitebloggers.com Dave Nalle

    Truly remarkable that this should be possible after previous similar scandals in the 1970s and 1980s.

    Dave

  • Lumpy

    Maybe this is why Halliburton gets no bid contracts, because they are at least not engaged in intentional fraud.

  • Dr Dreadful

    So, they charge the Pentagon $998,798.

    They’re being fined $750,000.

    That’s almost a $150,000 profit.

    Nice work.

  • Lumpy

    Wasn’t there also some mention of jail time? Also I’d bet the fine is in addition to resritution. And all their assets are getting sold, right?

  • bliffle

    Well, lumpy, were there?

  • Clavos

    Fuckin’ stupid ass government.

    And we’re seriously considering letting them administer and run the healthcare system?

    Howard: God bless you in dealing with Dean.

    Are you staying?

  • Nancy

    No wonder the US is drowning in debt: first $700 ashtrays, then the military “loses” a quarter-million weapons & ammo, now this.