Friday, June 10, 2016

Feds Use Al Capone Precedent to Convict Procurement Fraudster

Al Capone is arguably one of the most notorious tax evaders in history. Although well-known as the king of Chicago gangsters, the Federal Government couldn't put together any criminal charges that would stick until they nailed Capone for failing to pay taxes in 1931. Capone was convicted of five counts of income tax evasion and sentenced to eleven years in prison.

Why the story about Al Capone? Well, the Justice Department announced that a federal jury convicted a man for omitting $56 thousand from his 2013 federal income tax return. Unfortunately, that's not really news, it happens all the time. But then we noticed that the Defense Criminal Investigative Service (DCIS, part of the DoD's Inspector General office) was involved in the investigation. That got us curious. Why would DCIS investigate income tax evasion. Upon further reading, we learned that the tax evader was a former contracting official for the U.S. Army at Redstone-Arsenal in Huntsville. Uh oh.

Digging a bit deeper, we found that this former "high level" contracting official was implicated (not charged or prosecuted) into a much larger investigation. He was suspected of helping steer helicopter contracts to a "flamboyant financier" in exchange for a lucrative consulting contract after  he retired from the Army.

The Feds probably didn't have enough information to convict the guy for taking bribes so they went after him "Al Capone" style.

Read the DOJ press release here.

Read about the underlying case here.


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