Wednesday, April 19, 2006

Iraq contractor pleads guilty to fraud

Iraq contractor pleads guilty to fraud, US says

WASHINGTON (Reuters) - A U.S. contractor in Iraq pleaded guilty in connection with a bid-rigging scheme designed to defraud the former Coalition Provisional Authority in Iraq, the Justice Department said on Tuesday.

In a plea deal unsealed in federal court, contractor Philip Bloom admitted that between December 2003 and December 2005, he conspired with some public officials, including several U.S. Army officers, to rig bids on Iraq rebuilding contracts.

The total value of the contracts awarded to Bloom exceeded $8.6 million for construction and demolition projects, the department said.

Bloom admitted paying the authority and U.S. military officials more than $2 million in money and gifts, the department said. In exchange, they used their official positions to award contracts to Bloom and his companies.

Bloom faces up to 40 years in prison, a five-year term of supervised release, and a fine of $750,000, the department said. Under the terms of his plea agreement, he must pay $3.6 million in restitution and forfeit another $3.6 million in assets to the U.S. government.

Bloom's lawyer, John Nassikas, said he was in federal custody in Washington. Nassikas said he was seeking to have Bloom released on bail and hoped his sentence would be "substantially reduced" because of his cooperation with authorities.

The U.S.-led Coalition Provisional Authority governed Iraq after the March 2003 invasion. Iraqi authorities took control in June 2004.

Stuart Bowen, the U.S. inspector general for Iraq reconstruction, said the case underscored the Washington's determination to prosecute contractors for committing crimes in Iraq, even if they involved Iraqi funds.

"It's a sign that oversight works, that deterrence is important and it sends a message to others that have committed crimes that we are on the case," Bowen told Reuters in a telephone interview.

Bowen said 70 additional criminal investigations were under way now, but declined to give details about the amount of money involved in those cases.