Baltimore, Maryland – Jonathan Mickle, age 43, of Asheville, North Carolina, formerly of Taneytown, Maryland, pleaded guilty late yesterday to conspiracy to commit wire fraud, and to tax fraud, in connection with schemes to defraud the United States by illegally obtaining millions of dollars in federal contracts, and to defraud the employees of two Maryland corporations of their health and welfare benefits.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Steven Anderson, of the Washington Regional Office, U.S. Department of Labor - Office of Inspector General, Office of Labor Racketeering and Fraud Investigations; Special Agent in Charge Thomas Jankowski of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; Marc I. Machiz, Director of the Philadelphia Regional Office of the Labor Department’s Employee Benefits Security Administration; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service - Mid-Atlantic Field Office; Small Business Administration Inspector General Peggy E. Gustafson; and Brigadier General Keith M. Givens, Commander Air Force Office of Special Investigations .
According to his plea agreement, from 2004 through 2012, Mickle worked for Quantell, Inc. and Intaset Technologies Corporation, headquartered in Carroll County, Maryland, but with offices in Garrett County, Maryland and elsewhere. Quantell and Intaset provided labor services, including environmental science, engineering and information technology services, to federal and state agencies and the private sector. Shaun Tucker, and his wife, Joanne Tucker, were controlling officers and majority shareholders of Quantell, Inc. and Intaset Technologies Corporation.
Federal Procurement Fraud
During the course of Mickle’s employment, Quantell and Intaset obtained federal contracts and task orders. Mickle’s responsibilities included task order proposals and during the time period August 2004 to July 2005, Mickle worked as the Chief Operating Officer of Quantell. According to the plea agreement from at least 2005 to 2010, there were misrepresentations made by Quantell and Intaset, including that they were separate companies, in order for the companies to bid on federal government set-aside contracts designed to benefit small businesses. If the companies had been treated as affiliated companies for contracting purposes, they would not have been eligible for the millions of dollars of small business contracts they obtained, including a 2011 multi-million dollar contract for work to be performed by Quantell at Camp Lejeune in North Carolina. Mickle assisted in Quantell and Intaset bidding on, and securing, government contracts, even though he knew that the information put in those bids was false. For example, by 2008 Mickle learned that the companies self-certified false information when bidding on government contracts, including false information about past revenue, the number of employees, the size and headquarters of the bidding company and the management and ownership of the bidding company. Despite this knowledge, Mickle continued to work on the preparation of government contract bids. As a result, Quantell and Intaset fraudulently obtained government contracts worth more than $10 million.
Employee Benefit Fraud
Many of the Quantell and Intaset contracts with the federal government were only available to companies that certified that they would use a portion of the money paid on the contract to provide bona fide health and welfare benefits to their employees pursuant to the McNamara-O’Hara Service Contract Act (SCA). As a result, the service contract employees across the country that were hired by Quantell and Intaset were covered by the SCA. From 2005 to 2008, SCA money paid to Quantell and Intaset under federal contracts was deposited into qualified employee health and welfare plans subject to the Employee Retirement Income Security Act (ERISA). At this time, the ERISA plans had a third party administrator and trustees who were not associated with the Tuckers, Quantell, and Intaset.
According to Mickle’s plea agreement, beginning in 2008 the SCA funds were no longer contributed to the ERISA plans. Instead, Mickle and his co-conspirators created various entities with no legitimate business purpose (the shell companies), that were used to divert the SCA funds for use by members of the conspiracy, including Mickle, instead of using the money for the benefit of the Quantell and Intaset employees. Mickle and other co-conspirators made false statements that the shell companies were providing bona-fide health benefits and falsely representing that the employees were receiving all of the benefits to which they were entitled. The members of the conspiracy also created fake documents to support the financial transactions involving the SCA funds, including fake invoices. The conspirators had meetings to divide up the SCA funds on a periodic basis among themselves.
Mickle admitted that from 2007 through 2010, the conspirators illegally diverted at least $675,000 of employee benefit money for their personal use, victimizing more than 190 employees. Mickle personally obtained more than $100,000 from October 2008 to February 2010. According to Mickle’s plea agreement, during the entire period of the conspiracy, including after Mickle left Quantell and Intaset, the members diverted approximately $1.6 million of employee benefit money for their personal benefit, causing harm to more than 250 victim employees.
Finally, Mickle acknowledged that he submitted a false joint tax return for the 2011 tax year, in which he reported that his taxable income was zero, and the amount of tax due was $830. In fact, Mickle’s taxable income was $30,753, and the tax owed was $11,957.
Mickle faces a maximum sentence of 20 years in prison and a $250,000 fine or twice the gain or loss for the wire fraud conspiracy, and a maximum of three years in prison and a $100,000 fine for tax fraud. U.S. District Judge J. Frederick Motz has scheduled sentencing for November 3, 2015, at 2:15 p.m.
Shaun Tucker, a/k/a “Shawn Turner,” and “Mark Tyler,” and his wife, Joanne Tucker, a/k/a “Joanne Krcma,” “Jill Swanson,” and “Jocelyn Turner,” both age 49, of Keymar, Maryland, were previously charged for their roles in the scheme and are scheduled to go to trial in September, 2015.
Today’s announcement is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
United States Attorney Rod J. Rosenstein commended the U.S. Department of Labor –OIG/Office of Labor Racketeering and Fraud Investigations, IRS – Criminal Investigation, U.S. Department of Labor - Employee Benefits Security Administration, DCIS, SBA Office of Inspector General, and Air Force Office of Special Investigations for their work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys Harry Gruber and Judson Mihok, who are prosecuting the case.