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Former Army Official And Virginia-based Defense Contractors
Charged With Honest Services Wire Fraud And Bribery

WASHINGTON, D.C. – A federal grand jury in the Western District of Virginia in Charlottesville, Va., returned a four-count indictment charging Kenneth N. Harvey, 50, Michael G. Kronstein, 44, and Karla R. Kronstein, 36, of Rileyville, Va., with two counts each of honest services wire fraud and one count each of bribery, Assistant Attorney General Alice S. Fisher of the Criminal Division announced today.

According to the indictment, Harvey is the former chief of the Acquisition Logistics and Field Support Branch within the U.S. Army, Intelligence and Security Command (INSCOM), G4, Maintenance Division at Fort Belvoir, Va. In this capacity, Harvey was responsible for, among other things, recommending the award, modification and payment of maintenance and logistics contracts in support of INSCOM missions around the world. Michael and Karla Kronstein are the president and chief executive officer, respectively, of Program Contract Services, Inc. (PCS), a private company that provides program management, logistical and operational support to military commands.

The indictment alleges that in January 1999, Harvey recommended that INSCOM award PCS a multi-million dollar maintenance and logistics contract. Following the contract award, Harvey recommended modifications to the contract and approved payments to PCS, which resulted in the U.S. Army paying PCS over $4.7 million dollars. In exchange for these acts, the Kronsteins paid Harvey’s spouse and third parties, for Harvey’s benefit, more than $35,000, and offered Harvey a position of employment with PCS. The indictment further alleges the defendants concealed these payments and the offer of employment from Harvey’s superiors at INSCOM.

If convicted of all charges, the defendants face a maximum sentence of up to 55 years or a fine of up to $750,000, or both. An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent until or unless found guilty in a court of law.

This case is being prosecuted by Trial Attorney Erin Aslan and Senior Counsel William J. Corcoran of the Public Integrity Section, headed by Acting Section Chief Andrew Lourie of the Criminal Division. This case is being investigated by the U.S. Army Criminal Investigation Command, Major Procurement Fraud Unit, Washington Metro Fraud Resident Agency, and the U.S. Department of Defense, Office of Inspector General, Defense Criminal Investigative Service.