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Army Chief Warrant Officer Sentenced To Prison 28 Months for Taking $50,000 Cash Bribe

February 20, 2008

ROCK ISLAND, Ill. – A U.S. Army Chief Warrant Officer, Peleti “Pete” Peleti Jr., 41, was sentenced to a term of 28 months in federal prison today for accepting a $50,000 cash bribe while stationed in Kuwait, as announced by U.S. Attorney Rodger A. Heaton, Central District of Illinois. Peleti, currently stationed in Hawaii, is to report on April 14, 2008, to the federal Bureau of Prisons to begin serving his prison term. U.S. District Judge Michael M. Mihm further ordered that Peleti pay a fine of $7,500 in addition to a $50,000 money judgment and forfeiture of items, including watches and souvenirs, purchased with the bribe money.

Peleti pled guilty on February 9, 2007, to accepting $50,000 in $100 bills from the president of a Kuwaiti company seeking a food services supplies contract to the U.S. military. At the time, in December 2005, Peleti was the Army’s Theater Food Service Advisor for Kuwait, Iraq and Afghanistan and was stationed at Camp Arifjan, Kuwait. Peleti also pled guilty to smuggling about $40,000 of the cash in his clothing and luggage when he traveled from Kuwait City to Dover, Delaware in mid-December 2005.

U.S. Attorney Heaton stated, “Mr. Peleti’s criminal conduct brought dishonor to him and had the potential to undermine the public’s confidence in military contracting. This prison sentence sends a clear message that those who corrupt the integrity of the contracting process face serious punishment.”

The Army’s food service contracts were being provided to the Army by Kellogg, Brown and Root Services, Inc., under KBR’s prime contract with the U.S. Army known as LOGCAP III. LOGCAP (Logistics Civil Augmentation Program) is a U.S. Army program that uses civilian contractors to support the logistical needs of the U.S. military forces. In December 2001, the LOGCAP III prime contract was awarded to KBR by the U.S. Army Operations Support Command, with headquarters at the Rock Island Arsenal in Rock Island, Illinois, and was administered by the Army Field Support Command, also at the Rock Island Arsenal.

Law enforcement agencies participating in the investigation include: the FBI, Springfield Division; the Internal Revenue Service Criminal Investigation Division, Chicago Field Office; the Defense Criminal Investigative Service, Central Field Office, St. Louis, Missouri; and the U.S. Army Criminal Investigation Command, North Central Fraud Field Office, Detroit, Michigan.

The case was prosecuted by Jeffrey B. Lang, First Assistant U.S. Attorney; Greggory R. Walters, Assistant U.S. Attorney, Peoria Division; and, John Michelich, Senior Trial Attorney, Criminal Division, Fraud Section, U.S. Department of Justice.

In October 2006, the Department of Justice announced the formation of a National Procurement Fraud Task Force 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. The Procurement Fraud Task Force – chaired by Assistant Attorney General Alice Fisher – includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community, and a number of other federal law enforcement agencies. The cases brought by members of the Task Force demonstrate the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

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