Two Men Plead Guilty in U.S. Department of State Contracting Fraud Scheme and Contractor Cover-Up
ALEXANDRIA, Va. – Tony Chandler, 68, of Severn, Maryland, pleaded guilty today to charges of conspiracy to commit wire fraud and a conflict of interest related to his conduct as a U.S. Department of State contracting officer’s representative. In a related case, Curtis L. Wrenn, Jr., 60, of Triangle, Virginia, formerly the president of a contractor performing under Chandler’s supervision, pleaded guilty today 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 Marvin Hulsey, 52, of Stafford, Virginia, one of Wrenn’s employees.
In statements of facts filed with the plea agreements, Chandler admitted to conspiring with Hulsey 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, 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.
Wrenn, as the president of the State Department contractor employing Hulsey, later 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 (sic) throw him under the bus.”
Chandler was previously indicted by a federal grand jury on May 14, 2015. Chandler faces a maximum penalty of 25 years in prison if convicted, while Wrenn faces a maximum penalty of five years in prison if convicted. Both defendants will be sentenced on Sept. 18, 2015. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Hulsey was indicted with Chandler on May 14, 2015 for wire fraud and conspiracy to commit wire fraud. Hulsey pleaded not guilty to all charges before U.S. District Judge Claude M. Hilton on May 29, 2015 and is scheduled for trial on Aug. 17, 2015.
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 Andrew G. McCabe, Assistant Director in Charge of the FBI’s Washington Field Office, made the announcement after the plea was accepted by U.S. District Judge Claud M. Hilton.
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. Special Assistant U.S. Attorney Brian D. Harrison and Assistant U.S. Attorney Grace L. Hill are prosecuting the case.
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 for Chandler and Hulsey 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. Related court documents and information concerning Wrenn may be found on PACER by searching for Case No. 1:15-cr-150.