Baltimore, Maryland –A federal grand jury has indicted Eric D. Price, age 58, of Fayetteville, North Carolina for conspiracy to defraud the United States and wire fraud charges 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 Aberdeen Proving Ground (APG), in Harford County, Maryland.
The indictment was announced by Acting United States Attorney for the District of Maryland Stephen M. Schenning; Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service – Mid-Atlantic Field Office; Special Agent in Charge L. Scott Moreland, Mid-Atlantic Fraud Field Office, Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
According to the seven-count indictment, in March 2006, the U.S. Army Contracting Command at APG 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 MJ-6, LLC, a company which he and his wife formed in Ohio in 2008 to obtain military subcontracts. John Kays steered business on Task Orders 77, 11, and 115 to MJ-6.
According to the indictment, Kays and Barrow agreed that Price would be added to the MJ-6 payroll. Price’s job was purportedly to directly support Kays. Price purportedly worked remotely at Fayetteville, North Carolina while Kays worked at APG. From February 2010 thru February 2012, Price allegedly fraudulently received more than $100,000 in salary payments for a “no show” job at MJ-6 for which 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 allegedly submitted false and fictitious status reports and invoices through MJ-6 to the prime contractor.
Price faces a maximum sentence of 5 years in prison for the conspiracy; and 20 years in prison for each wire fraud count. An initial appearance has not yet been scheduled.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
In connection with a larger bribery scheme involving John Kays and Barrow, Barrow pleaded guilty to paying John Kays and his wife Danielle Kays, also a government official, bribes of approximately $800,000, including $500,000 in cash. John Kays pleaded guilty to receiving bribes of approximately $800,000 from Barrow. John Kays’ sentencing proceeding is scheduled for April 3, 2018, at 9 am before Judge Catherine C. Blake. Barrow’s sentencing is set for April 20, 2018, at 2 pm before Judge George L. Russell, III. Danielle Kays is presently serving an 18 month sentence; she pleaded guilty to conspiracy to defraud the United States and bribery. 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 Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
Acting United States Attorney Stephen M. Schenning commended the DCIS, Army Criminal Investigation Command, and FBI for their work in the investigation. Mr. Schenning thanked Assistant U.S. Attorneys Joyce K. McDonald and Harry M. Gruber, who are prosecuting the case.