FORMER PROJECT LEADER OF ARMY PROGRAM SENTENCED TO FIVE YEARS’ IMPRISONMENT

Dennis C. Pfannenschmidt, United States Attorney for the Middle District of Pennsylvania, announced today that United States District Court Judge Edwin M. Kosik sentenced Derrick Jackson, age 48, of Stafford, Virginia, to five years’ imprisonment following his conviction by a jury of all counts of an indictment charging him with his involvement in a bribery and fraud scheme. Following an eight-day trial in April 2008, the jury returned the guilty verdicts after three hours of deliberation.

According to U.S. Attorney Pfannenschmidt, the case centered around two United States Army installations known as the Tobyhanna Army Depot and Fort Belvoir, as well as Computer Giants, a New York City based company. Computer Giants sold computers and other communication related merchandise to the Army. The evidence at trial established that while working on behalf of an Army “communications” program known as “CAISI.” Derrick Jackson and a major from Fort Belvoir met with Computer Giants’ main salesman, Steve Chung, in a New York City restaurant. During the meeting they formed an agreement to provide Computer Giants confidential information in the form of its competitor’s bids in order to allow Computer Giants to win a million dollar government contract connected to CAISI program. In consideration, Chung began providing Jackson and the other public officials bribes in the form of money, merchandise and gift cards.

To create a fund to pay the bribes, Chung, Derrick Jackson and other the government workers arranged to steal government money and property through a number of schemes: (1) False contracts with Computer Giants where the goods that the government paid for were not supplied; (2) “Short shipment” of merchandise by Computer Giants where less was supplied than paid for; and (3) the filling of Computer Giants’ orders with another military installation utilizing merchandise shipped directly out of government stock.
The money generated from those schemes was put in “slush funds” for the conspirators to buy electronic equipment for themselves, including plasma televisions, cameras, camcorders, and stereo systems, in addition to other items. Between 2001 and 2006, with the help of its government coconspirators, Computer Giants was able to generate more than $8,000,000 in business with the Army. In return, Computer Giants distributed over $200,000 from the slush funds to the government workers. A fraud hotline tip eventually led to an investigation and uncovered the above scheme.

The evidence at trial established that Derrick Jackson represented the government as a project leader of the CAISI program and received bribes worth over $134,000 in the form of electronic merchandise, gift cards, and cash. The evidence at trial established that Jackson illegally provided confidential information to help Computer Giants win two major contracts and was fully involved in the theft schemes of government property and money.

U.S. Attorney Pfannenschmidt commended the diligent efforts of the Special Agents of the U.S. Army Criminal Investigation Command and the Defense Criminal Investigative Service.

United States Attorney Pfannenschmidt also noted that parole has been abolished, and Jackson will be required to serve at least 85% of his 60-month sentence, assuming he receives full time off for good behavior while incarcerated.

This case was prosecuted by Assistant U.S. Attorney John Gurganus.

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