December 18, 2013

Three ex-soldiers plead guilty for using insider information on Army contracts

The case shows how easily contractors can profit from military work.

The Associated Press

SALT LAKE CITY — Three former Special Forces soldiers have pleaded guilty to charges of using inside bid information to win more than $50 million in Army contracts in Afghanistan in a case that shows how easily contractors can profit from military business.

All three defendants could face prison time, but federal prosecutors say they are recommending leniency because the Army awarded the contracts on short notice with little scrutiny while trying to fight a war.

The case started in Utah as a money-laundering investigation when one of the men was questioned about withdrawing large amounts of cash.

The partners ultimately were paid $54 million to service U.S.-supplied weapons for Afghan troops and provide logistical training for the country’s national army.

The defendants started out by bidding more – not less – than a U.S. competitor they knew the Army would disqualify for not being able to do the work, said Robert Lund, an assistant U.S. attorney in Salt Lake City.

They were so certain of winning the initial contract that they raised their price above an Army estimate. The Army had no complaints about the service for Afghan troops, but the government says the deal was tainted from the start. One defense lawyer – former U.S. Attorney for Utah Brett Tolman – has said the case proved only how easy it was to win Army contracts in Afghanistan.

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