Pentagon Notices Million Dollar Bill For Shipping 38 Cent Item

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.

Article Author: Howard Dratch

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