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Thursday, February 01, 2007

Former DOD Contractor Sentenced in Bribery, Fraud, Money Laundering Scheme in Iraq

A former US Department of Defense (DOD) contractor was sentenced to nine years in prison and ordered to forfeit $3.6 million for his role in a bribery and fraud scheme involving contracts in the reconstruction of Iraq, Assistant Attorney General Alice Fisher of the U.S. Justice Department Criminal Division announced today.

Robert Stein, 52, of Fayetteville, N.C., was sentenced today in U.S. District Court for the District of Columbia by Judge Colleen Kollar-Kotelly. The judge also sentenced Stein to three years of supervised release.

Stein was arrested in Fayetteville on Nov. 14, 2005, and pleaded guilty on February 2, 2006, to being a felon in possession of a firearm, possession of machine guns, bribery, money laundering, and conspiracy in connection with a scheme to defraud the Coalition Provisional Authority --South Central Region (CPA-SC) in al-Hillah, Iraq.

"Robert Stein will now spend nine years in jail for exploiting hispublic position and accepting bribes for contracts during the rebuilding ofIraq," says Fisher. "The Department of Justice will protect the integrity of the federal contracting process byaggressively prosecuting fraud, bribery and other crimes that taint missions as critical as the reconstruction of Iraq."

Stein admitted to participating in a complex bribery, fraud and money-laundering scheme while serving as the comptroller and funding officer forthe CPA-SC. From December 2003 through December 2005, Philip Bloom, a U.S. citizen who owned and operated several companies in Iraq and Romania, Bruce Hopfengardner, a lieutenant colonel in the U.S. Army Reserves, and numerous public officials, including several high-ranking U.S. Army officers, conspired to rig the bids on contracts being awarded by the CPA-SC so that all of the contracts were awarded to Bloom. In return, Bloom provided the public officials with over $1 million in cash, SUVs, sportscars, a motorcycle, jewelry, computers, business class airline tickets, liquor, future employment with Bloom, and other items of value.

In addition, Bloom laundered over $2 million in currency that Stein and his co-conspirators stole from the CPA-SC that had been designated to be used for the reconstruction of Iraq. Bloom then used his foreign bankaccounts in Iraq, Romania and Switzerland to send the stolen money to Stein, Hopfengardner and other public officials in return for the awarded contracts. In total, Bloom received over $8.6 million in rigged contracts.

During the course of the conspiracy, Stein and other co-conspiratorsstole U.S. currency and funneled those funds to Bloom in order to purchase illegal controlled weapons which they converted to their own personal use in the United States, including assault rifles, silencers, and grenade launchers.

Stein has cooperated with the government's ongoing investigation.

On March 10, 2006, co-conspirator Bloom, pleaded guilty to relatedcharges of conspiracy, bribery and money laundering in connection with thesame scheme as Stein. Bloom is scheduled to be sentenced on February 16,2007.

On August 25, 2006, co-conspirator Hopfengardner pleaded guilty to related charges of conspiracy to commit wire fraud and money laundering inconnection with the same scheme as Bloom and Stein.

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