You are here

Justice News

Department of Justice
U.S. Attorney’s Office
Southern District of California

FOR IMMEDIATE RELEASE
Friday, August 19, 2016

Former Navy Employee and Defense Contractor Plead Guilty to Engaging in Kickback Scheme

NEWS RELEASE SUMMARY – August 19, 2016

Assistant U.S. Attorneys Rebecca S. Kanter (619-546-7304) and Andrew Galvin (619-546-9721)

SAN DIEGO – A former Navy Facilities Engineering Command (“NAVFAC”) civilian employee and a defense contractor pleaded guilty yesterday to charges relating to their conspiracy to defraud the Navy by filing false claims related to government contracts. Bentley faces a maximum sentence of ten years in prison, while Cioe faces a maximum of five years.

Joseph Bentley, who was previously a civilian employee at NAVFAC Southwest, supervised crews that did roofing, welding, paving, fencing and other types of construction repair, and maintenance work for the Navy and U.S. Marine Corps. As part of his job duties, he was responsible for requesting and/or authorizing the purchase of materials, supplies and labor from local suppliers and contractors. One of the individuals he arranged for the Navy to contract with was Eugene Cioe, the owner of Alcem Fencing Company, which operated out of National City, California until May 2013, and the owner of Cioe Fencing Consultant and Material Sales after May 2013.

As detailed in Cioe’s plea agreement, Bentley and Cioe agreed that Bentley would recommend, authorize or otherwise arrange for Defendant to receive orders for purchases from the Navy in exchange for Cioe providing Bentley with a kickback – money in payment for codefendant Bentley’s assistance in directing business to Defendant.  For example, as Cioe admitted to Magistrate Judge Jan Adler in court today, in June 2011, Bentley arranged for Alcem to receive over $7,000 for a job on Building 322 on Naval Base San Diego (“NBSD”) through a Napa Auto Parts purchase in exchange for a $1,500 payment to codefendant Bentley from Defendant’s company. After billing the Navy and receiving $7,151.64 in government funds for materials for Building 322 on NBSD, Cioe  paid Bentley $1,500. In February 2013, codefendant Bentley arranged for Alcem to receive another job with the Navy in exchange for an illegal payment from Defendant to codefendant Bentley, specifically, Alcem cashier’s check number 664152 on February 12, 2013 for $5,000.

Both defendants admitted that the conduct continued into the following year, when Cioe presented false claims to the United States Navy for core-drilling work that was in fact performed by NAVFAC employees.  Specifically, between May 14 and June 4, 2014, Bentley arranged for Cioe to receive two orders for material, labor and equipment to drill 48 holes and set fencing posts at the Naval Base Coronado (“NBC”).   Cioe then invoiced the Navy $4,764 for the core-drilling project, and was paid by the Navy for the work.  Both defendants admitted in court today that they knew that in truth, neither Cioe nor anyone working for Cioe Material Sales actually performed the work reflected on the invoices in exchange for the $4,764 in total payments; in fact, the work was performed by NAVFAC employees.

In addition to the false claims admitted to by both defendants, Bentley further admitted to using the Navy to purchase $3,545 in roofing materials, falsely claiming that they were for a roofing project on Building 618 on NBC, which Bentley then stole to install on his personal residence in Imperial Beach.  Then, after Bentley became aware of the government’s investigation, he asked a co-conspirator who had installed the roof to give the investigators false information about the roofing order.  Specifically, he told his co-conspirator to falsely tell the investigating agents that his (Bentley’s) father was still alive when the roof was installed and asked the co-conspirator to backdate a receipt for the demolition of the old roof by approximately six months. Both of these lies would have had the effect of creating false evidence that the roof was actually installed long before the ABC order for the NBC project, thus, providing Bentley a possible defense to the charge that the roofing materials on his father’s house were the same materials paid for by the Navy in January 2013.

U.S. Attorney Laura Duffy commented, “Our office will continue to prosecute government insiders and military contractors who abuse and corrupt the procurement process to line their own pockets. This case is an excellent example of the continued success our federal law enforcement agencies have had in rooting out corruption through their cooperative joint investigations.”

FBI Special Agent in Charge Eric S. Birnbaum stated, “The FBI will continue to work with our law enforcement partners to root out corrupt individuals who use their government positions and associations with the government for personal gain.”

The FBI encourages the public to report allegations of public corruption to the FBI public corruption hotline at telephone number (877) NO-BRIBE (662-7423).”

Bentley and Cioe will be sentenced by United States District Judge Jeffrey T. Miller on December 2, 2016 at 9:00 a.m.


DEFENDANTS

 

Case Number: 15CR0195-JM

Joseph H. Bentley

Age: 55

Imperial Beach, California

Eugene Cioe

Age: 59

El Cajon, California

 

CHARGES

Bentley: Counts 3 & 4: False, Fictitious and Fraudulent Claims (18 U.S.C. § 287). Count 5: Theft of Public Property (18 U.S.C. § 641)

Cioe: Count 1: Conspiracy to Make False, Fictitious and Fraudulent Claims (18 U.S.C. § 371).

MAXIMUM PENALTIES

False, Fictitious and Fraudulent Claims (18 U.S.C. § 287) – maximum 5 years’ prison, $250,000 fine, $100 mandatory special assessment, 3 years’ supervised release

Conspiracy to Make False, Fictitious and Fraudulent Claims (18 U.S.C. § 371) – maximum 5 years’ prison, $250,000 fine, $100 mandatory special assessment, 3 years’ supervised release

Theft of Public Property (18 U.S.C. § 641) – maximum 10 years’ prison, $250,000 fine, $100 mandatory special assessment, 3 years’ supervised release

 

 

INVESTIGATING AGENCIES

Defense Criminal Investigative Service

Federal Bureau of Investigation

Internal Revenue Service, Criminal Investigations

Naval Criminal Investigative Service

 

 

 

CAS16-0818-Bentley
Topic: 
Financial Fraud
Updated August 19, 2016