Eric D. Price pleaded guilty this week to a charge of conspiracy to defraud the United States and commit wire fraud related to payments for what prosecutors said was a “no show” job on a subcontract under contracts awarded by the Army’s Communications-Electronics Command headquartered at Aberdeen Proving Ground.
Price, 58, of Fayetteville, N.C., pleaded guilty Tuesday in federal District Court in Baltimore, according to court records and the Maryland U.S. Attorney’s Office, which prosecuted him.
He is one of four people charged in a bribery and fraud scheme that involved some $21 million in federal contracts at the Harford County military installation, according to prosecutors.
According to his plea agreement, 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, according to prosecutors.
Matthew Barrow was the president and owner of MJ-6 LLC, a company he and his wife formed in Ohio in 2008 to obtain military subcontracts. Kays, then a Bel Air resident who had a senior civilian position at APG , steered business on the work to MJ-6, prosecutors said.
According to Price’s plea agreement, Kays and Barrow agreed that Price would be added to the MJ-6 payroll. Price’s job was purportedly to directly support Kays, prosecutors said, with Price working remotely from North Carolina while Kays worked at APG.
From February 2010 through February 2012, Price fraudulently received more than $100,000 in salary payments for a “no show” job at MJ-6 for which MJ-6 billed more than $400,000 to the prime contractor, which was passed through to the Army, according to federal prosecutors.
Kays certified and approved MJ-6’s work, including Price’s “no show” job, prosecutors said. 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 from May 2010 through February 2012. Barrow, through MJ-6, billed the prime contractor, who billed the Army, $422,704 for Price’s purported work, which was certified by Kays. Price was unaware of the amount of mark-up to his salary by MJ-6, prosecutors said.
As part of his plea agreement, Price will be required to pay $105,556.17 in restitution to the government.
Price also faces up to five years in prison for the conspiracy. U.S. District Judge George L. Russell III has scheduled sentencing for Sept. 28.
In connection with a larger bribery scheme involving John Kays, 44; his wife Danielle Kays, 43; and Matthew Barrow, 44, of Toledo, Ohio, Barrow pleaded guilty to paying bribes of about $800,000, including $500,000 in cash, to John Kays and Danielle Kays, the latter who also was a government official.
John Kays pleaded guilty to receiving bribes of approximately $800,000 from Barrow and was sentenced to six years in prison last month.
Danielle Kays is serving an 18-month sentence for conspiracy to defraud the United States and bribery.
Barrow pleaded guilty to bribery last May and is awaiting sentencing.
Barrow and John Kays were initially indicted in July 2016. A superseding indictment handed up in January 2017 also named Danielle Kays as a defendant. Price was indicted in late February 2018, according to court records.
John Kays, Danielle Kays and Matthew Barrow all graduated from West Point where they were classmates, according to prosecutors.
The APG case was investigated by several agencies including the Defense Criminal Investigative Service, the Major Fraud Unit of the U.S. Army Criminal Investigation Command and the FBI, according to U.S. Attorney Robert K. Hur.
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, according to a news release.
The Task Force includes the United States Attorney’s Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies.
