Wife of Murrieta U.S. Marine Capt. pleads guilty to skimming charges
A teary-eyed Janet Schmidt, 39, admitted to U.S. District Judge Virginia Phillips that she had ``willfully and knowingly'' signed her name to a false income tax return in March 2009, covering up some $458,000 in taxable earnings.
Thursday, March 18, 2010
A U.S. Marine captain’s wife, accused with her husband of skimming hundreds of thousands of dollars from government contracts tied to troop supplies in Iraq, pleaded guilty today to tax fraud.
A teary-eyed Janet Schmidt, 39, admitted to U.S. District Judge Virginia Phillips that she had “willfully and knowingly” signed her name to a false income tax return in March 2009, covering up some $458,000 in taxable earnings.
“Is your decision to plead guilty entirely voluntary?” Phillips asked.
“Yes, your honor,” Schmidt replied.
“Do you understand everything that’s being alleged here today?” the judge asked.
“Yes,” said Schmidt, choking up.
The woman and her husband, Capt. Eric Schmidt, 39, were charged earlier this month with one count each of conspiracy to commit wire fraud and filing a false income tax return for allegedly siphoning away an estimated $1.73 million in funds intended to buy equipment for Marines deployed in support of Operation Iraqi Freedom.
The Schmidts, who reside in Murrieta and remain free on bond, have both entered into plea deals with the U.S. Attorney’s Office, according to federal prosecutor Charles Kovats.
He said Eric Schmidt is scheduled to enter his plea on April 2.
Janet Schmidt is slated to be sentenced June 7. She could face three years in federal prison, though the U.S. Attorney’s Office is expected to recommend a much lower term for the defendant, who has a child with her husband.
She could have faced a maximum 23 years behind bars if convicted on both counts.
The defendants were arrested following a months-long investigation by the Naval Criminal Investigative Service, the IRS and the Special Inspector General for Iraq Reconstruction.
According to prosecutors, the alleged fraud occurred in 2008 while Eric Schmidt, who is attached to the First Marine Division at Camp Pendleton, was a Marine Corps contracting representative working on the Iraqi First Program, designed to increase the participation of Iraqi companies in federal contracts for the benefit of Iraq’s economy.
Schmidt is accused of using his position to steer business to the Al- Methwad Co., with whose executives he apparently had a relationship.
Janet Schmidt located vendors “to provide the goods purportedly to be furnished by Al-Methwad under the terms of the contract,” said U.S. Attorney’s Office spokesman Thom Mrozek.
He alleged that the woman, using funds provided by Al-Methwad, purchased “far fewer or inferior products than those required by the contract.”
A deficient shipment would then be sent to Iraq, where her husband signed off on it, certifying everything was in order and that Al-Methwad had met the terms of its Pentagon contract, according to the U.S. Attorney’s Office. The company was then paid in full by the U.S. government, prosecutors said.
Marines, meantime, were shortchanged on supplies. According to the criminal complaint, one contract called for a number of exercise machines and dumbbell sets to be delivered to an outfit, but the Schmidts allegedly purchased an insufficient quantity and pocketed $93,000 that should have been spent on the gear.
Federal agents seized the Schmidts’ two homes — the one in Murrieta and another in Big Bear — and also impounded their Mercedes Benz sedan and BMW M3 Coupe.
As part of her plea agreement, Janet Schmidt forfeited all claims to the property.
She told Phillips that she intends to move back to her home state in the Midwest. Eric Schmidt remains on active duty, according to Kovats.
Janet Schmidt and her attorney, Vicki Podberesky, declined to comment on the case.
Tags: Capt. Eric Schmidt, Charles Kovats, First Marine Division at Camp Pendleton, Iraqi First Program, Janet Schmidt, marine corps, Marines, Murrieta, Operation Iraqi Freedom, SWRNN, U.S. Attorney's office, U.S. District Judge Virginia Phillips, U.S. Marine captain's wife
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