Final Defendant Sentenced in State Department Contracting Fraud Scheme and Contractor Cover-Up
ALEXANDRIA, Va. – Marvin Hulsey, 52, of Stafford, was sentenced today to one year and one day in prison, and two years of supervised release for conspiracy to commit wire fraud.
According to court documents, Hulsey, who was employed as a program manager for a government contractor, admitted to conspiring with Tony Chandler, 69, of Severn, Maryland, an employee of the State Department, to submit false invoices to the State Department in order to conceal unallowable costs for nutritional supplements purchased by employees under Hulsey’s supervision. As part of the scheme, Hulsey caused the employees to be reimbursed by his employer for the nutritional supplement purchases, and then caused false invoices to be made and submitted to the State Department for the cost of the nutritional supplements. Chandler, as an authorized distributor of the nutritional supplements for a multi-level marketing company, earned commissions in excess of $25,000 from the purchases made by Hulsey’s employees. Despite knowing that he was personally profiting from the sales of the nutritional supplements, Chandler, in his official capacity as an employee of the State Department, approved the majority of the false invoices. The false invoices submitted to the State Department as part of the scheme totaled more than $170,000.
In a related case, Curtis L. Wrenn, Jr., 60, of Triangle, pleaded guilty to making a false statement to the State Department by concealing that an internal investigation conducted by the contractor discovered credible information of fraud involving Chandler and Hulsey. Wrenn as president of the State Department contractor employing Hulsey, learned of Hulsey’s submission of false invoices to the State Department and of Chandler’s role in the scheme. Wrenn knew that he had a responsibility under the Federal Acquisition Regulation to timely disclose to the government credible evidence of fraud, but instead omitted facts related to the fraud from the final letter delivered to the State Department. After submitting the altered letter, Wrenn met with Chandler and told him he had “saved his bacon.” Wrenn later wrote in an email that he told Chandler “to get this resolved with minimal questions or we throw him under the bus.”
Hulsey pleaded guilty on July 24, 2015. In court documents filed on Oct. 5, 2015, Hulsey admitted that he engaged in a second fraud scheme in which he submitted false and inflated claims to the State Department related to a business owned by his wife. This second fraud scheme caused an additional loss of approximately $140,000.
Chandler and Wrenn both pleaded guilty on June 12, 2015, and were both sentenced on Sept. 18, 2015. Chandler was sentenced to six months in prison, while Wrenn was sentenced to one year of probation.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; Steve A. Linick, Inspector General for the U.S. Department of State and Broadcasting Board of Governors; and Paul M. Abbate, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after sentencing by U.S. District Judge Claud M. Hilton. Special Assistant U.S. Attorney Brian D. Harrison and Assistant U.S. Attorney Grace L. Hill prosecuted the case.
This case was investigated by the U.S. Department of State, Office of Inspector General (DOS-OIG) and the FBI’s Washington Field Office. Substantial assistance was provided by the Criminal Analysis Branch of the DOS-OIG
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:15-cr-137.