Taxpayers/Government Get "Screwed" for more than $20M

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A small South Carolina parts supplier collected about $20.5 million over six years from the Pentagon for fraudulent shipping costs, including $998,798 for sending two 19-cent washers to a Texas base, U.S. officials said.

The company also billed and was paid $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq, and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.

The owners of C&D Distributors in Lexington, South Carolina--twin sisters--exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled "priority" were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.

C&D's fraudulent billing started in 2000, Stroot, the Defense Criminal Investigative Service's chief agent in Raleigh, North Carolina, said in an interview. "As time went on they got more aggressive in the amounts they put in."

The price the military paid for each item shipped rarely reached $100 and totaled just $68,000 over the six years in contrast to the $20.5 million paid for shipping, she said.

"The majority, if not all of these parts, were going to high-priority, conflict areas--that's why they got paid," Stroot said. If the item was earmarked "priority," destined for the military in Iraq, Afghanistan or certain other locations, "there was no oversight."

Scheme Detected

The scheme unraveled in September after a purchasing agent noticed a bill for shipping two more 19-cent washers: $969,000. That order was rejected and a review turned up the $998,798 payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

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Posted by Mr. Ferretstien on 2007-08-23 18:22:58
And Americans wonder why there is no money. Do you really think this ISNT a wide spread problem? All you have to do is remember the toilet seat.
 

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