WASHINGTON – Four U.S. Agency for International Development (USAID) contractors and a subcontracting company have been charged with conspiracy, major fraud and wire fraud arising from their scheme to defraud the United States in connection with the war and rebuilding efforts in Afghanistan, Acting Assistant Attorney General Matthew Friedrich for the Criminal Division announced today.
The seven-count indictment, unsealed yesterday, was returned by a federal grand jury in Washington, D.C., on Sept. 30, 2008. Delmar Dwayne Spier, 72, and Barbara Edens Spier, 59, both residents of Houston, were arrested yesterday and will make their initial appearances in the U.S. District Court for the Southern District of Texas today. William Felix Dupre, 51, a resident of North Carolina, also was arrested yesterday and made his initial appearance in the U.S. District Court for the Central District of California. In addition, the indictment charges Behzad Mehr, a resident of Afghanistan who remains a fugitive, and United States Protection and Investigation, LLC (USPI), a security company owned by the Spiers. USPI is incorporated in the state of Texas and operates in Afghanistan.
According to the indictment, USPI was a subcontractor for USAID based on a USAID contract with the Louis Berger Group Inc. (LBGI) as part of the Rehabilitation of Economic Facilities Program (REFS Program). The REFS Program was developed by USAID to provide a broad range of assistance to the people of Afghanistan, including building roads between major cities in Afghanistan, and building schools and health facilities. The USPI subcontract, worth approximately $60 million, required that it provide security for all LBGI contractors working on the REFS Program in Afghanistan. The USPI subcontract was a cost-reimbursement contract, which required LBGI and ultimately USAID, to reimburse USPI for all incurred expenses and pay USPI a fee equivalent to a percentage of its incurred expenses.
The indictment alleges that from June 2003 through July 2007, the defendants defrauded the United States by obtaining reimbursement for inflated expenses supposedly incurred by USPI for rental vehicles, fuel and security personnel. The indictment specifically alleges that Behzad Mehr fabricated invoices purportedly from rental vehicle and fuel companies in Afghanistan, which therefore inflated the amounts USPI actually paid for rental vehicles and fuel. USPI is also alleged to have created false documents to inflate its expenses for employing security personnel from the Afghan Ministry of Interior. Delmar Dwayne Spier, Barbara Edens Spier and Dupre are alleged to have used the false documents created by Mehr to obtain reimbursement from LBGI, and ultimately from USAID, for USPI's inflated expenses and profits.
"USAID and the American companies it relies upon to deliver development programs throughout the world must always be steadfast protectors of U.S. taxpayer funds. As highlighted by this indictment, the USAID Office of Inspector General will vigorously pursue the investigation and prosecution of fraudulent activities and hold accountable those who would attempt to violate the provisions of this integral component of the U.S. foreign assistance program," said Assistant Inspector General for Investigations Adrienne R. Rish. Rish commended Trial Attorney Jennifer Taylor, members of the FBI and the National Procurement Fraud Task Force for their assistance in this multi-faceted investigation.
The investigation of this case was conducted by the USAID Office of the Inspector General, the FBI and members of the National Procurement Fraud Task Force. The National Procurement Fraud Task Force, created in October 2006 by the Department of Justice, is chaired by Acting Assistant Attorney General Friedrich and was designed to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.
If convicted, the conspiracy charge carries a maximum sentence of five years in prison and a $250,000 fine. The charge of wire fraud carries a maximum sentence of 20 years in prison and a $250,000 fine. If convicted of major fraud, defendants face a maximum prison sentence of 10 years and a $1 million fine.
The case is being prosecuted by Trial Attorney Jennifer R. Taylor of the Criminal Division's Fraud Section.
An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.