Reservist Arrested in Iraqi Graft Case

A lieutenant colonel in the U.S. Army Reserve has been arrested on charges that he stole $100,000 from the occupation authority in Iraq and accepted money and gifts in exchange for steering reconstruction contracts to a businessman, the Justice Department said Thursday.

Michael Brian Wheeler, 47, of Amherst Junction, Wis., faces conspiracy, money laundering and weapons charges, according to the criminal complaint filed under seal Monday in Washington. It was made public Thursday, a day after Wheeler’s arrest. He is in custody in Wisconsin, the Justice Department said.

Robert J. Stein Jr., 50, of Fayetteville, N.C., a former occupation official, and Philip H. Bloom, a U.S. businessman who has lived in Romania for many years, were arrested last month on charges that they were part of the conspiracy.

At least one other unidentified public official took part in the kickback scheme but has been cooperating with investigators, court documents say.

Wheeler was on active duty in Iraq in 2003 and 2004, working with the Coalition Provisional Authority in Hillah, according to the complaint and accompanying affidavit. Responsible for developing contracts for reconstruction and soliciting bids, he used his position to rig contract awards for Bloom, the affidavit says.

He also allegedly stole $100,000 from the CPA’s Hillah office and took it back to Ft. Bragg, N.C., the affidavit says, citing Stein’s testimony.

Stein and Wheeler also conspired to buy dozens of weapons on the pretext that they were to be used to protect CPA offices in Hillah, the affidavit says.

Instead, they acquired four grenade launchers, 20 fully automatic submachine guns, 12 machine guns, 12 .45-caliber pistols and substantial ammunition, the affidavit says.