Former Coast Guard Petty Officer Pleads Guilty to Fraud, Accepting Bribes
NORFOLK, Va. – Nathan Allen Dunn, 30, formerly of Virginia Beach, Va., pleaded guilty today to wire fraud and accepting more than $220,000 in bribes as a public official.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Otis E. Harris, Jr., Special Agent in Charge, Coast Guard Investigative Service, Chesapeake Region; and Michael P. Dawson, Special Agent in Charge, Department of Homeland Security, Office of Inspector General, Washington Field Office, made the announcement after the plea was accepted by United States Magistrate Judge Lawrence R. Leonard.
“In two years, Mr. Dunn took more than $220,000 in bribes in exchange for using his position to award over-priced and false contracts for favored shipping companies,” said U.S. Attorney MacBride. “Rooting out criminals who abuse the public’s trust strengthens the integrity of – and our confidence in – the government’s procurement process.”
Dunn was indicted on May 23, 2012, by a federal grand jury on charges of conspiracy, wire fraud, accepting bribes as a public official, and false statements. Dunn faces a maximum penalty of 20 years in prison when he is sentenced before Judge Mark S. Davis on April 29, 2013.
According to a statement of facts filed with his plea agreement, from October 2009 to November 2011, Dunn was an active duty U.S. Coast Guard (USCG) Petty Officer assigned as a Transportation Administrator at the Surface Forces Logistics Center in Norfolk, Va. Dunn’s primary duty was to coordinate the shipping of large freight such as boats, trailers, and generators between USCG bases located throughout the United States. Dunn utilized the Department of Defense Transportation Command (TransCom) automated system to bid out and then contract the shipments with authorized freight brokerage companies. During the time frame covered by the indictment, Dunn’s co-conspirator owned twelve such freight brokerage companies, all located in Brookwood, Ala.
In September 2009, Dunn’s co-conspirator traveled to Norfolk to meet with Dunn and told him that in exchange for Dunn issuing USCG freight contracts to the co-conspirator’s companies, the co-conspirator would kickback a percentage of the profits to Dunn. Dunn agreed and, shortly thereafter, the co-conspirator began offering monetary bribes to Dunn by providing him with debit cards linked to several of the co-conspirator’s business bank accounts. To inflate the profit he made from each contract, Dunn would fraudulently manipulate various data entered into the TransCom computer system in order to artificially inflate the price of the shipping contracts he steered to the co-conspirator’s companies. Dunn would also create false shipping contracts for shipments that did not exist, then award the contract and profits to the co-conspirator. Since no freight was actually being shipped pursuant to these false contracts, the payment made to the co-conspirator from the USCG was total profit to the co-conspirator, resulting in Dunn also receiving a larger kickback. Over a two-year period, Dunn received more than $220,000 in bribe payments from the co-conspirator. The total fraud loss to the United States is more than $1 million.
This investigation was brought as part of the Hampton Roads Procurement Fraud Initiative, a collaboration of defense investigative agencies, Inspectors General, and law enforcement dedicated to strengthening the integrity of the federal procurement system.
This case was investigated by the United States Coast Guard Investigative Service and the Department of Homeland Security, Office of the Inspector General, Washington Field Office. Assistant United States Attorneys Stephen W. Haynie and V. Kathleen Dougherty are prosecuting the case on behalf of the United States.A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at http://www.vaed.uscourts.gov or on https://pcl.uscourts.gov.