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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Virginia

FOR IMMEDIATE RELEASE
Wednesday, July 15, 2015

Three Owners and CEO of Falls Church Based Contracting Company Indicted in National Guard Bribery Case

ALEXANDRIA, Va. – Three owners and the CEO of a government contracting company headquartered in Falls Church, Virginia – all of whom are retired Army National Guard colonels – were indicted today for their alleged participation in a scheme to bribe an active-duty Army National Guard colonel in order to obtain millions of dollars of Army National Guard marketing, retention and recruitment contracts.

“These criminal charges reflect our continued commitment to rooting out public corruption wherever it occurs,” said Dana J. Boente, U.S. Attorney for the Eastern District of Virginia. “The public contracting process should be one of integrity and fairness, and these cases should send a strong message that public corruption will be vigorously prosecuted in the military as well as other areas of government.”

“As alleged in the indictment, four retired colonels have been charged with using their corporate marketing firm to funnel bribe payments to high-ranking accomplices in the Army National Guard to corruptly obtain lucrative marketing contracts,” said Leslie Caldwell, Assistant Attorney General of the Justice Department’s Criminal Division.  “This case is emblematic of the Criminal Division’s ongoing efforts to root out corruption wherever it may be found, including at the highest ranks of our armed services.”

“The FBI’s top criminal priority is investigating and stopping corrupt officials and the organizations they do business with,” said Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office.  “These indictments outline a significant bribery scheme that undermined a fair government contracting process.”

“The actions of the defendants have brought them dishonor and erode confidence in the integrity of a contracting process intended to support their fellow citizen soldiers,” said Paul Sternal, Acting Special Agent in Charge of the Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office.  “The Defense Criminal Investigative Service, alongside its law enforcement partners and the U.S. Attorney's Office, remain vigilant and committed to bringing individuals who subvert the acquisition system to justice.”

“Today's indictment illustrates our commitment and cooperation shared between law enforcement agencies investigating this type of corruption and bribery,” said Frank Robey, Director of the U.S. Army Criminal Investigative Command’s Major Procurement Fraud Unit (Army-CID).  “It is unconscionable how these former military officers betrayed the offices they once held for monetary gain.”

Edwin Stuart Livingston III, 67, of The Villages, Florida; Ronald Joseph Tipa, 68, of Sunny Isles Beach, Florida; Thomas Edward Taylor, 66, of Alexandria; and Ross Bernard DeBlois Sr., 55, of Fairfax Station, Virginia, were indicted by a federal grand jury today with one count of conspiracy to commit bribery, one count of bribery of a public official, one count of conspiracy to commit honest services fraud, and five counts of honest services fraud. Livingston, Tipa and Taylor are owners of a Military Personnel Services Corporation (MPSC).  DeBlois is the company’s chief executive officer.

The National Guard Bureau (NGB) is a joint activity of the U.S. Department of Defense (DOD), the state units of the Army National Guard and the Departments of the Army and Air Force.  The NGB, whose offices are located in Arlington, Virginia, oversees the distribution of federal funding provided to the Army National Guard and its state units.

The DOD provides millions of dollars of federal funds to the Army National Guard for, among other things, advertising, marketing and sponsorships in order to recruit new members.  The NGB then uses these funds to promote the Army National Guard on a national level by entering into marketing contracts.

The indictment charges that Livingston, Tipa, Taylor and DeBlois corrupted the NGB’s contracting process by providing an Army National Guard colonel, Robert Porter, 51, of Columbia, Maryland, with 1 percent of the gross contract amount for all contracts he steered to MPSC.

According to the indictment, Livingston, Tipa and Taylor – along with John Jones, 77, of Stafford, Virginia – were each a 25 percent owner of MPSC and constituted MPSC’s board of directors.  The indictment charges that in 2010 or 2011, Livingston and Tipa offered to pay Porter – a then active-duty Colonel in the Army National Guard who held a high level position at the NGB – 1 percent of the gross contract amount of any contracts that he steered to MPSC while he remained in uniform.  As part of this alleged corrupt agreement, the 1 percent bribe payment would be paid to Porter only after he retired from the NGB and began working for MPSC, and the payment would be concealed as an “incentive fee” or “bonus” payment in MPSC payroll records.

The indictment charges that throughout 2011 and 2012, in his role as the director of NGB’s Guard Strength Directorate, Porter steered at least three NGB marketing contracts to MPSC, known as the Michael Jordan American Motorcycle Association Motorsports Program, the Trademark Licensing Agency Program contract and the Guard Strength Directorate’s Strength Readiness Support Center Services.  These contracts were worth approximately $5.5 million in total, according to the indictment.

MPSC paid Porter his 1 percent bribe payment in three checks:  $10,326.50 on July 23, 2015, $10,326.50 on Aug. 19, 2014, and $10,899 on Sept. 10, 2014, according to the indictment.

Porter pleaded guilty to conspiracy to commit bribery and bribery of a public official in September 2014.  Jones, a retired brigadier general from the New York Army National Guard and founder of MPSC, pleaded guilty to conspiracy to commit bribery and bribery of a public official in February 2015.

The case was investigated by the FBI’s Washington Field Office, DCIS’s Mid-Atlantic Field Office and Army-CID’s Major Procurement Fraud Unit.  The case is being prosecuted by Assistant U.S. Attorney Jonathan Fahey, and Trial Attorney Alison L. Anderson of the Criminal Division’s Fraud Section.

Individuals with allegations of bribery or corruption within the NGB’s retention and recruitment contracting or at MPSC are encouraged to contact the Criminal Division of the FBI’s Washington, D.C. Field Office at (202) 278–2000.

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.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.

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Updated July 17, 2015