Took them that long to figure out???

[theveed]

Pentagon Paid $998,798 to Ship Two 19-Cent Washers

Tony Capaccio Thu Aug 16, 3:16 PM ET

Aug. 16 (Bloomberg) -- A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to an Army base in Texas, U.S. officials said.
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The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.

The owners of C&D Distributors in Lexington, South Carolina -- twin sisters -- exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled ``priority'' were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.

C&D and two of its officials were barred in December from receiving federal contracts. Today, a federal judge in Columbia, South Carolina, accepted the guilty plea of the company and one sister, Charlene Corley, to one count of conspiracy to commit wire fraud and one count of conspiracy to launder money, Assistant U.S. Attorney Kevin McDonald said.

Corley, 46, was fined $750,000. She faces a maximum prison sentence of 20 years on each count and will be sentenced soon, McDonald said in a telephone interview from Columbia. Stroot said her sibling died last year.

Corley didn't immediately return a phone message left on her answering machine at her office in Lexington. Her attorney, Gregory Harris, didn't immediately return a phone call placed to his office in Columbia.

`Got More Aggressive'

C&D's fraudulent billing started in 2000, Stroot, the Defense Criminal Investigative Service's chief agent in Raleigh, North Carolina, said in an interview. ``As time went on they got more aggressive in the amounts they put in.''

The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said.

``The majority, if not all of these parts, were going to high-priority, conflict areas -- that's why they got paid,'' Stroot said. If the item was earmarked ``priority,'' destined for the military in Iraq, Afghanistan or certain other locations, ``there was no oversight.''

Scheme Detected

The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000. That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

The Pentagon's Defense Logistics Agency orders millions of parts a year. ``These shipping claims were processed automatically to streamline the re-supply of items to combat troops in Iraq and Afghanistan,'' the Justice Department said in a press release announcing today's verdict.

Stroot said the logistics agency and the Defense Finance and Accounting Service, which pays contractors, have made major changes, including thorough evaluations of the priciest shipping charges.

Dawn Dearden, a spokeswoman for the logistics agency, said finance and procurement officials immediately examined all billing records. Stroot said the review showed that fraudulent billing is ``not a widespread problem.''

``C&D was a rogue contractor,'' Stroot said. While other questionable billing has been uncovered, nothing came close to C&D's, she said. The next-highest billing for questionable costs totaled $2 million, she said.

Stroot said the Pentagon hopes to recoup most of the $20.5 million by auctioning homes, beach property, jewelry and ``high- end automobiles'' that the sisters spent the money on.

``They took a lot of vacations,'' she said.

[n2knee]

yan ang masama sa mga automated machines/systems e. saka mo lang malalaman ang mistake pag may nag audit.

[niky]

That's still happening at the Pentagon? I thought they stamped that out way back in the 80's!

[Jun aka Pekto]

That's still happening at the Pentagon? I thought they stamped that out way back in the 80's!

You mean the era of $600 toilet seats

[niky]

And thousand dollar hammers? Or was that nails?

Honestly, Army procurement is one of the richest goldmines for anyone looking to make a quick buck... the usual swiss-cheese accountability of a government purchasing system, and a budget to shame many third-world countries.

[OTEP]

Pati floorwax overpriced nung 1980's. May technical term pa sila noon, hindi 'floorwax' ang nakalagay sa order sheet. hehehe.

[wildthing]

yan ang masama sa mga automated machines/systems e. saka mo lang malalaman ang mistake pag may nag audit.

IMO ang mali sa automation like those is the AUDITING PROCEDURE.

Hindi porke automated yun, ibig sabihin ay full proof na...dapat nga ang auditing effort is doubled...

[wildthing]

hindi ba't ang conspiracy theory dyan ay ang mga funds na yan actually finances the "wars" that their "enemies" create or para sa mga studies ng aliens na nasa Area 51...

[oldblue]

hindi ba't ang conspiracy theory dyan ay ang mga funds na yan actually finances the "wars" that their "enemies" create or para sa mga studies ng aliens na nasa Area 51...

or swordfish

[empy]

baka naman WMD yun kaya ganung kamahal?


WMD = Washers of Mass Destruction