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LL’s spent the last couple of hours poring though the affidavit filed by federal authorities in support of the arrests made today in connection with OCTO corruption.
Here’s the headlines:
- The whole scheme was laid bare thanks to the cooperation of an OCTO employee who was introduced into the scheme last March by Yusuf Acar. The employee went to the FBI in August.
- The dollar amount stolen is uncertain, but a company established to collect Acar’s illicit earnings took in almost $300,000. The affidavit highlights suspicious transactions totaling over $600,000.
- Acar said in a taped phone call he was prepared to leave for Turkey and intimated he was stashing money for that possibility.
- Several other unnamed current or former OCTO employees are implicated in the scheme in various ways. Two of them have connections to the Office of the Chief Financial Officer—-home of the $50M tax scandal uncovered in 2007.
- The scheme took two forms: ghost payrolling and inflated purchase orders.
- Acar had tapped into District e-mail systems and was intercepting e-mail traffic to and from the Office of the Inspector General in order to monitor whether they had gotten wind of his schemes.
Still want more? You could read the whole thing [PDF] or you could just read these highlights:
—-Yusuf Acar was involved in multiple schemes to defraud the District government: “In one scheme, a quantity of goods is ordered by OCTO….The vendor actually orders a lesser number of the item from the distributor, but bills the DC government for the full amount originally requested by OCTO. An OCTO official, such as YUSUF ACAR, falsely certifies that the greater quantity was actually received and the vendor bills the District of Columbia Government for the greater amount and is paid accordingly. The co-conspirators then split the proceeds of the crime. A second scheme involves billing for ‘ghost employees’. These are contract employees supposedly hired by a vendor, such as AITC, to perform work under a specific contract for OCTO. However, these ghost employees never actually perform any work under the contract. The vendor, who is involved in the scheme, bills the DC government for the employees’ hours. An OCTO official, such as YUSUF ACAR, approves the timesheet so that the vendor can be paid. The money is then split between the co-conspirators.”
—-“In a recorded conversation on December 10, 2008, YUSUF ACAR states in part, regarding the risk of getting caught, “I mean, I will jump on the next plane, go to Turkey and disappear. That’s fine.” YUSUF ACAR has also stated that he is trying to move approximately $200,000 in cash out of the country to Turkey via diplomatic pouch.”
—-Several other entities and OCTO employees are names as being involved in the conspiracies.
- Innovative IT Solutions Inc., a contractor that has occupied office space adjacent to AITC for years and used to sublet from AITC. Last year, IITS did about $220,000 in business with OCTO.
- Circle Networks Inc. “did approximately $2.2 million in business with the DC government,” even though Acar was listed on several documents as having an ownership stake in the company. This was apparently the entity which collected Acar’s ill-gotten gains, which totaled about $200,000.
- ALLNET Systems is a company, owned by a current OCTO employee, “S.E.,” currently applying for cetrified business enterprise status with the D.C. government. The complaint alleges that Acar colluded with “S.E.” to use this company as part of his schemes.
- Network Osiris is owned by a former OCTO employee, “F.A.,” now working for the Office of the Chief Financial Officer, and his wife, “S.A.” “F.A.” used to work with Acar. “ACAR and F.A. generally divided their territory and kept their activities separate, that is, ACAR dealt with contractors, and F.A. dealt with equipment. However, there were times when they worked together to steal money. CW heard that F.A.’s wife had been used as part of a “ghost employee” scheme. Bank records show that F.A. and S.A. both received payments from AITC via direct deposit into an account in the name of Network Osiris from October 2005 to April 2007.”
- “T.S.” is an OCTO employee who used to work for OCFO. She is thought to have knowingly processed false invoices. In a recorded phone call, Acar says that Bansal “basically…take cares of her.”
- “W.M.” is an OCTO employee reporting to Acar. According to the informant, Acar has said that this fellow “is involved and aware” of illicit purchases.
- The informant is also an OCTO employee and an Army veteran; he went to the FBI last summer after Acar asked him to join his schemes earlier that year. “[I]n his role as a seeming co-conspirator, [the informant] has also received payment in these schemes,” which is in control of the FBI.
—-The affidavit details one scheme where an employee, “Eric,” leaves OCTO, then Acar and Bansal conspire together with the onformant to cintue to collect his earnings. This causes a conflict, when Acar feels he should get more of the money than Bansal because he (and the informant) are taking on more risk. Says Acar to the informant, “This is beginning, okay? This is just like uh a scratch on the surface. We have a six million dollars. Six million mother [expletive] dollars. You and I should make at least three of that….So, that said, that said. I don’t want to [expletive] you know, you know go halfsies with this, this [expletive].” Later, Acar and the informant would engage in another ghost-employee scheme, hiring an undercover FBI agent as the “ghost.” In a third instance, Acar had a position being filled under another company’s contract transferred to AITC; the position was then “ghosted,” according to the indictment. Later, Acra, Bansal, and the informant conspire to have that position extended in order to squeeze even more money out of it.
—-In one illicit purchasing scheme, AITC submitted a quote for 2,000 licenses for some security software, but only contracts with the software provider for 500 licenses. This scheme, too, causes a conflict between Acar and Bansal over just how much of a percentage Bansal deserves—-leading to an uncomfortable phone conversation between the informant and Bansal when a check the informant gets turns out to be smaller than he expected.
—-Acar, according to the affidavit, was monitoring e-mails being sent and received by the D.C. Office of the Inspector General. In early February, Acar had apparently captured an e-mail containing names of the conspirators. The informant learned and expressed concern about the scheme to Acar, who told him, “I have a rule set anything between OCTO IP range and, and OIG IP range, I capture….Not only capture, and then he runs another rule, that captures data. It queries certain names, my name, your name, our people’s name … some like common names and it pulls up, it gives me the actual daily report.” The informant expressed relief, and Acar said, “So, so when I saw it I was like, what the [expletive], what’s going on [laughter]?…Are we going to jail? (Laughter)”