Irvine Firm Indicted in Defense Fraud : U.S. Jury Alleges That False Billing Schemes Cost U.S. $460,785
An Orange County engineering firm and its president are facing charges they defrauded the Department of Defense of $460,785 on military contracts through a variety of phony billing schemes.
Systems Engineering Technology Associates Corp. of Irvine, its affiliate, SETAC Inc., and Thomas Snooks, who lives in San Clemente, were indicted Thursday by a Los Angeles federal grand jury for alleged mail fraud, wire fraud, filing false claims and making false statements to government agencies.
In announcing the grand jury action, U.S. Atty. Robert Bonner said, “The type of fraudulent mischarging and overbilling in this case is morally equivalent to outright thievery from the American taxpayers.”
Assistant U.S. Atty. David Wiechert, the prosecutor assigned to the case, said the defendants have been handling more than $4 million a year in military contracts with the Air Force, Navy and other defense agencies since 1976.
The 19-count indictment accuses the firm of altering time cards that resulted in $258,000 in over-billing to the government, manipulation of sick leave records to divert $58,785 owed the government, recouping of a $103,000 loss on a fixed price contract with the Naval Surface Weapons Center in Virginia by submission of fraudulent proposals for a follow-on contract and the mischarging of overhead claims to other government contracts.
It also is alleged in the indictment that the company listed former employees on contract proposals to fraudulently “enhance the firm’s expertise.”
Snooks is individually charged with illegal diversion of $41,000 in government funds. He is free on $10,000 bond pending a scheduled court appearance June 17 before a U.S. magistrate in Los Angeles.
If convicted, Snooks faces a maximum penalty of 95 years imprisonment and a fine of $109,000. The firms could be fined an additional $109,000.