News and Press Releases

former government contractor pleads guilty to mail fraud,
money laundering;

admits stealing $573,000 in computer equipment from USDA, selling stolen equipment over the Internet

July 28, 2010

KANSAS CITY, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Lee’s Summit, Mo., man pleaded guilty in federal court today to 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, pleaded guilty before U.S. Magistrate Judge Sarah W. Hays to the charges contained in a Feb. 9, 2010, federal indictment.

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 e-Bay, 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.

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.

Under federal statutes, Vaill is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being 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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