BALTIMORE -- WBFF -- A North Carolina man pleaded guilty to a charge of conspiracy to defraud the United States and commit wire fraud, related to payments to him for a "no show" job on a sub contract under contracts awarded by the U.S. Army Communications Electronics Command headquartered at the Aberdeen Proving Ground in Harford County.
According to Eric Price's plea agreement, in March 2006, the U.S. Army Contracting Command at A.P.G. awarded a 10 year, $19.2 billion contract to seven prime contractors to provide technology services to support the integrated engineering, business operations and logistics needs for the Army, Task Orders 11, 77 and 115 were placed against this contract.
John Kays had a leadership position as a civilian employee of the Army related to these task orders. Matthew Barrow was the president and owner of M7-6, LLC, a company which he and his wife former in Ohio in 2008 to obtain military subcontracts. John Kays steered business on Task Orders 77,11 and 115 to MJ-6.
According to Price's plea agreements, Kays and Barrow agreed that Price would be added to the MJ-6 payroll. Price's job was to directly support Kays. Price worked remotely at Fayetteville, North Carolina, while Kays worked at A.P.G. From February 2010 through February 2012, Price fraudulently received more than $100,000 in salary payments for a "no show" job at MJ-6 billed over $400,000 to the prime contractor, which was passed through to the United States Army.
Kays certified and approved MJ-6's work, including Price's "no show" job. To facilitate the "no show" job, Price submitted false and fictitious status reports and invoices through MJ-6 to the prime contractor. In all, MJ-6 paid Price $105,556.17 for his "no show" job during the period from May 2010 through February 2012. Barrow, through MJ-6, billed the prime contractor, who in turn billed the Army, $422,704 for Price's work, which was certified by Kays.
Price was unaware of the amount of mark up to his salary by MJ-6. As part of his plea agreement, Price will have to pay restitution to the government of $105,556.17. Price faces a maximum sentence of five years in prison for the conspiracy. Sentencing is September 28 at 2:30 p.m.
In connection with a larger bribery scheme involving 44-year-old John Kays, his wife 43-year-old Danielle Kays, both of Bel-Air, and 44-year-old Matthew Barrow of Toledo, Ohio, Barrow pleaded guilty to paying bribes of $800,000, including $500,000 in cash, to John Kays and Danielle Kays, who was also a government official.
John Kays pleaded guilty to receiving bribes of $800,000 from Barrow and was sentenced to six years in prison. Danielle Kays is presently serving an 18 month sentence for conspiracy to defraud the United States and bribery. Matthew Barrow is awaiting sentencing. John Kays, Danielle Kays and Matthew Barrow all graduated from West Point where they were classmates.
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 Task Force includes the United States Attorney's Offices, the F.B.I., the U.S. Inspectors General community and a number of other federal law enforcement agencies.