Murrieta man accused of skimming $1.75 million from military
Eric Schmidt, 39, who is assigned to the First Marine Division at Camp Pendleton, was charged this morning with conspiracy to commit wire fraud and filing a false tax return.
Thursday, March 4, 2010
A Murrieta man who is a captain in the United States Marine Corps was charged today with conspiring with his wife to skim approximately $1.75 million from government contracts awarded under the Iraqi First Program while he was acting as a Marine Corps contracting officer’s representative in Iraq.
Eric Schmidt, 39, who is assigned to the First Marine Division at Camp Pendleton, was charged this morning with conspiracy to commit wire fraud and filing a false tax return that concealed the illicit income from the Internal Revenue Service, according to a news release from Thom Mrozek, with the U.S Attorney’s office.
Schmidt’s wife, Janet Schmidt, 39, also was charged today with the same two felony counts, Mrozek said.
Schmidt and his wife each face a statutory maximum penalty of 23 years in federal prison. Both defendants will be summoned to appear in federal court in Riverside for arraignments in the coming weeks.
According to the criminal information filed this morning, Mrozek said, Eric Schmidt used his position in the contracting process to steer contracts to his favored Iraqi contractor, the Al-Methwad Company.
The contracts were often awarded under the Iraqi First Program, which was designed to award certain contracts to Iraqi vendors to assist with Iraqi economic expansion and entrepreneurship. Once Al-Methwad had been awarded the contract, Janet Schmidt found United States-based vendors to provide the goods purportedly to be furnished by Al-Methwad under the terms of the contract, Mrozek said.
Janet Schmidt purchased the goods using money provided by Al-Methwad, often purchasing far fewer or inferior products than those required by the contract. She then arranged for the goods to be delivered to the U.S. Marines in Iraq. Once the shipment arrived in Iraq, Eric Schmidt falsely certified that both the number and type of goods required by the contract had been provided by Al-Methwad Company to the Marines, Mrozek said. Armed with the false certification, representatives from Al-Methwad Company sought and received payment from the United States, he said.
The criminal information filed today outlines how the Schmidts defrauded the Marine Corps in a contract that called for the delivery of exercise machines and dumbbell sets. According to the charging document, the Schmidts fraudulently caused the delivery of fewer workout items than called for under the contract and realized illicit gains of approximately $93,000 on that one contact.
Investigators have determined that the couple collected a total of approximately $1.75 million in illegal payments during Eric Schmidt’s one-year deployment to Iraq in 2008. Because they failed to report any of these illegal payments on their tax return for 2008, they substantially understated their income to the I.R.S.
“This is an example of public corruption that directly affected our Marines’ military capabilities in Iraq” Chris Hendrickson, acting special agent in charge of the Defense Criminal Investigative Service, Western Field Office, said in a written statement. “Captain Schmidt found an Iraqi partner, exploited his role as a logistics officer, and profited from the Marines’ role in providing security in Iraq. The Defense Criminal Investigative Service places a special focus on these war procurement cases to ensure the troops can finish their jobs without the burden of shortages created by wartime opportunists. DCIS will investigate military corruption wherever it occurs”
During the course of this investigation, government agents seized from the Schmidts two California real properties – one in Big Bear and one in Murrieta – two motor vehicles, and approximately $40,000 in cash.
The ongoing investigation in this case is being conducted by the Defense Criminal Investigative Service, the Naval Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction, and IRS-Criminal Investigation.
Tags: Al-Methwad Company, Chris Hendrickson, Eric Schmidt, First Marine Division at Camp Pendleton, Iraqi First Program, Janet Schmidt, SWRNN, Thom Mrozek, U.S Attorney’s office, United States Marine Corps
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Comment by: BRYAN Posted: March 4, 2010, 3:13 pm
WILL LATEST CORRUPTION AT OSAN AFB KOREA BE COVERED-UP? – IS 1LT SET TO “TAKE THE FALL”
FOR “HIGHER-UPS,” OR HAS “DEAL” BEEN CUT TO KEEP “ROGUE COP” QUIET IN EXCHANGE FOR “SLAP-ON-THE-WRIST?” – GEN “MAURY” FORSYTH AND COL MARIA DOWLING ON “HOT SEAT” IN WORST SCANDAL TO HIT USFK SINCE EX-ARMY CONTRACT OFFICER, COL RICHARD MORAN CAUGHT TAKING KICKBACKS – $400K IN $100 BILLS – STUFFED UNDER HIS MATTRESS
(c) 2005 MilitaryCorruption.com
Life is never dull for U.S. military forces in Korea. We have reported, while the “main stream media” in the States ignored, stories like the time a full colonel and chief contracting officer for the U.S. Army in Korea was caught with “kick-back money” – $400,000K alone in hundred dollar bills – stuffed under his mattress (the bird colonel’s Korean wife was the “bagman” in the scam). Or the Army major who dumped his wife’s very dead body off a bridge in the middle of the night, just as a Korean police patrol was passing by. Bad timing!