News and Press Releases

former government contractor sentenced
for mail fraud, money laundering

stole $573,000 in computer equipment from uSDA,
sold stolen equipment over the Internet

FOR IMMEDIATE RELEASE
November 18, 2010

KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Lee’s Summit, Mo., man was sentenced in federal court today for a mail fraud scheme that involved stealing approximately $573,000 worth of computer equipment from the U.S. Department of Agriculture, where he worked as a contract employee, and selling it over the Internet for more than $166,000.

Gragg R. Vaill, 48, of Lee’s Summit, was sentenced by U.S. District Judge Nanette K. Laughrey to 18 months in federal prison without parole. The court also ordered Vaill to pay $400,000 in restitution.

On July 28, 2010, Vaill pleaded guilty to one count of mail fraud related to shipping the stolen computer equipment across state lines, and to one count of money laundering related to financial transactions of the proceeds of the fraud scheme.

Vaill worked as a contract employee for the U.S. Department of Agriculture. Vaill was a senior technician in the office of the chief information officer, a position that allowed him unrestricted access to the USDA main facility as well as additional office spaces and the warehouse.

Vaill admitted that he stole 64 Cisco computer switches and four Cisco fiber optical converters from the USDA between January 2006 and August 2009. Vaill sold the equipment online, including on eBay, for $166,083. Vaill also admitted that he sometimes accessed his email and eBay account from his work computer.

The buyers were unaware that Vaill had stolen the computer equipment. Vaill shipped each of the stolen switches and fiber optics converters via a commercial carrier, such as FedEx.

USDA reported a loss of approximately $571,425 from the theft of the switches, $1,500 from the theft of the fiber optic converters, and approximately $79,672 in labor cost during a six-hour network outage (for a total loss to USDA of $652,597). This outage occurred because Vaill stole two active network switches. The two switches provided network connectivity for approximately 225 USDA employees.

Vaill also admitted to stealing an unknown number of additional Cisco network switches from USDA and selling them. He used the funds to pay off his auto loan, purchase a house, and for personal investments.

This case was prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the U.S. Federal Protective Service and IRS-Criminal Investigation.

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