Contractor Pleads Guilty to Bribery Scheme at Walter Reed Army Medical Center and a Separate Arson Insurance Fraud Scheme
Greenbelt, Maryland - Louis Pisani, Jr., age 42, of Silver Spring, Maryland, pleaded guilty today to conspiracy to commit bribery and obstruction of an agency investigation in connection with a scheme to influence contracting at the Walter Reed Army Medical Center; and in a separate case, mail fraud in an arson insurance fraud scheme, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
Pisani was sole shareholder of Platinum Contractors, Inc. located in Silver Spring and Hyattsville, Maryland. In addition, Pisani and Leon Krachyna were each 50% shareholders and corporate officers in Home Sweet Home Moving and Storage, Inc. located in Hyattsville.
According to the plea agreement, from about the fall of 1999 until about February 2003, Pisani conspired with Krachyna and a civilian contract specialist with the U.S. Army Medical Command responsible for facilitating the procurement of goods and services for Walter Reed, to bribe the contract specialist to steer government contracts to Pisani’s companies, including one contract potentially worth up to $1.2 million. Pisani and Krachyna gave the contract specialist 10% of the contract proceeds, in the form of cash and checks, and also paid thousands of dollars in insurance premiums and loan payments on a truck they gave to the contract specialist. In exchange, the contract specialist gave Pisani and Krachyna confidential bidding information and his best efforts to cause the Army to award the contracts to their companies.
In September 2002, the Army Criminal Investigation Division initiated an investigation into contracts secured by Pisani. The following spring, in March 2003, an Army investigator contacted Pisani to schedule an interview about his contracts with Walter Reed. When the Army investigator interviewed Pisani in April 2003, Pisani falsely denied under oath that he paid the contract specialist money for contracts awarded to his company.
Finally, in June 2003, Pisani and another individual identified as “co-schemer B” purchased a residence on Edgefield Road in Bethesda, Maryland. Pisani and co-schemer B intended to turn a lucrative profit by demolishing the residence, subdividing the lots, and using the property for new residential construction to be re-sold.
Pisani and co-schemer B purchased an insurance policy on the Edgefield Road residence. The policy specifically excluded from coverage any loss caused intentionally by the insured or by a person directed by the insured. Pisani, co-schemer B and Pisani’s friend, Thomas Moriarty, discussed substantially damaging the residence by fire, after which they knew a claim on the policy would be submitted. To that end, Moriarty was asked to set fire to the house. On Friday evening, March 12, 2004, after co-schemer B prepared the residence with highly flammable fuel, Moriarty set fire to the residence, which was substantially damaged. On the night of the fire, Pisani arranged to have dinner with several friends at a restaurant, and co-schemer B traveled to New Jersey.
After being notified of the loss, the insurance company issued checks for $50,000 and $16,900, as an advance payment on the loss and for costs associated with temporary housing for Pisani and co-schemer B. When insurance company representatives and the Montgomery County Fire Marshal’s Office conducted an investigation of the cause of the fire, Pisani and co-schemer B tried to conceal their involvement in the fire by persuading another person not to reveal information about the fire to the Montgomery County Fire Marshal’s Office, and providing false and misleading information to the insurance company and the Fire Marshal’s Office. Suspicious of the cause of the fire, the insurance company did not pay the balance of the claim.
Krachyna, age 39, of Rockville, pleaded guilty on March 9, 2007 to conspiracy to commit bribery and faces a maximum sentence of five years in prison. Thomas Patrick Moriarty, age 38, of Bethesda, Maryland, pleaded guilty to wire fraud in connection with the scheme to defraud the insurance company by setting fire to the Edgefield Road residence and faces a maximum sentence of 20 years in prison. Sentencing dates have not been set for either man.
Pisani faces a maximum sentence of five years in prison followed by three years of supervised release for conspiracy to commit bribery and obstructing an agency proceeding and 20 years in prison, followed by three years of supervised release for mail fraud. No sentencing date has been set for Pisani.
United States Attorney Rod J. Rosenstein praised the Federal Bureau of Investigation, the Army Criminal Investigation Command, the Internal Revenue Service - Criminal Investigation and the Montgomery County Fire Marshal's Office for their investigative work. Mr. Rosenstein thanked Assistant U.S. Attorneys Michael R. Pauze and Steven M. Dunne, who are prosecuting these cases.