Owners of South Carolina Company Plead Guilty To Conspiring With Employees Of One Of The Nation's Largest Private Companies Relating to Extensive Bribery And Kickback Scheme
CHARLOTTE, N.C. – The two owners of a South Carolina-based company and a manager at one of the country’s largest private companies (“Victim Company”) appeared in federal court today and pleaded guilty to conspiracy, in connection with an extensive bribery and kickback scheme involving more than $35,000,000 of fraudulent overcharges, announced Andrew Murray, U.S. Attorney for the Western District of North Carolina.
Brian C. Ewert, 53, of Charlotte, Jennifer Maier, 51, of Clover, South Carolina, and Choung “Shawn” Nguyen, 47, of Wichita, Kansas, entered their guilty pleas before U.S. Magistrate Judge David S. Cayer.
John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division, David M. McGinnis, Inspector in Charge of the Charlotte Division of the U.S. Postal Inspection Service, and Matthew D. Line, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division, Charlotte Field Office (IRS-CI) join U.S. Attorney Murray in making today’s announcement.
Ewert was co-owner and primary sales representative of WDS, Inc., also known as Women’s Distribution Services, Inc. (WDS), located in Lake Wylie, South Carolina. One of Ewert’s responsibilities at WDS was to set prices for the supplies WDS provided to Victim Company. Maier was co-owner and Chief Executive Officer of WDS, responsible for running the company’s day to day operations.
Nguyen was a procurement manager with Victim Company’s Strategic Sourcing Function group, responsible for implementing and monitoring Victim Company’s supplier agreements with WDS. Nguyen reported to M.K., an uncharged co-conspirator and senior employee within Victim Company’s Strategic Sourcing Function group. Both Nguyen and M.K. were terminated by Victim Company in May 2016.
According to the criminal information and plea documents, from 2009 through 2016, Ewert, Nguyen, and M.K. conspired with each other to defraud Victim Company by allowing WDS to overcharge Victim Company by more than $35,000,000. As part of the conspiracy, Ewert paid more than $1 million in bribes to Nguyen, M.K., and others. Court records show that in 2007, M.K. helped Ewert start a business relationship with Victim Company. Between 2008 and 2016, with the help of M.K. and Nguyen, WDS dramatically increased its sales volume to Victim Company. For example, between 2012 and 2016, Victim Company purchased nearly $544 million in products from WDS.
Over the course of the scheme, in exchange for allowing WDS to overinflate the prices it charged Victim Company, Nguyen, M.K. and others were paid more than a million dollars in kickbacks. As the defendants admitted in court today, Ewert made regular cash payments to Nguyen and M.K., paid for family vacations, flew them on private jets, and gave them expensive gifts, including electronics. In exchange for the illicit bribes, Nguyen and M.K. assisted WDS in concealing from Victim Company more than $35 million in overcharges.
In late 2015 and early 2016, after Victim Company began to question WDS’s contracts, Ewert, M.K. and Nguyen took a number of steps to conceal the scheme and to impede Victim Company’s audit by, among other things, providing misleading pricing information, falsely claiming that WDS was in compliance with its pricing obligations according to its agreement with Victim Company, and falsely denying receiving any improper benefits from WDS. When Victim Company continued to demand proof related to pricing, Maier joined the conspiracy by creating at least 100 bogus invoices that she provided to Victim Company, in an effort to conceal more than $500,000 in fraudulent overcharges.
Ewert, Nguyen and Maier pleaded guilty to conspiracy to commit wire fraud. The charge carries a maximum prison term of five years and a $250,000 fine. They are currently released on bond. A sentencing date has not been set.
The FBI, USPIS, and IRS-CI investigated the case. Assistant U.S. Attorney Daniel Ryan, of the U.S. Attorney’s Office in Charlotte, is in charge of the prosecution.