Former Navy employee, defense executive indicted in $100M bribery scheme: DOJ
SAN DIEGO (FOX 5/KUSI) — Two people have been indicted by federal prosecutors for a bribery scheme involving over $100 million in government contracts. They are accused of conspiring with each other to get the contracts, ultimately using taxpayer money for their personal benefit.
A former civilian employee of a San Diego-based naval support center — James Soriano of Las Vegas, Nevada — and a former executive with a South Carolina defense contractor — Russell Thurston of Mt. Pleasant, South Carolina — are facing the charges detailed in the recently unsealed indictment shared by the U.S. Attorney’s Office for the Southern District of California.
According to the indictment, Soriano worked for the Naval Information Warfare Center (NIWC), which provides contract administration services for the Navy, throughout the scheme. From 2006 to 2019, Soriano was an engineer, project leader and certified “Contracting Officer Representative” with technological expertise to help manage Department of Defense contracts.
Soriano’s role was to act as a liaison between the government and the contractor.
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The indictment states Soriano instead used his influence to steer lucrative contracts to Thurston, an executive vice president of a company vying for defense contracts with locations in Arlington, Virginia, and Charleston, South Carolina.
The indictment further alleges that Thurston, and others working under him, gave Soriano valuable items like jobs for a family member and friends, free meals at various restaurants, and a ticket to the 2018 MLB All Star Game in Washington, D.C.
It also says one of the friends who was given a job at Soriano’s request then gave Soriano half her salary every month—$2,000 in cash. The indictment notes the friend was not actually performing the duties for which she was being paid.
In return for those gifts, Soriano is accused of taking official action to benefit Thurston and his company by allowing Thurston and other employees to draft procurement documents for various contracts, even where the company was competing for the contract against other bidders.
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Because of Soriano’s efforts, the company won a task order with a more than $300 million ceiling, prosecutors say. Several projects on that task order led the government to obligate more than $100 million to the company.
In an effort to hide their activities, Thurston, Soriano and other employees at the company are accused of intentionally deleting procurement documents.
Soriano is also accused of failing to disclose the gifts he received on his required OGE Form 450 every year, and is facing three counts of filing false tax returns for failing to declare the cash that he was receiving from his friend as income.
“The indictment of James Soriano and Russell Thurston should be a deterrent for individuals and companies contemplating or attempting to misuse positions of public trust in order to enrich themselves financially or ensure future lucrative contracts,” said Bryan D. Denny, Special Agent-in-Charge for the Department of Defense Office of Inspector General, Defense Criminal Investigative Service, Western Field Office. “The alleged actions subvert the integrity of the government’s acquisition process, waste taxpayers’ money, and ultimately degrade the readiness of America’s warfighters.”
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“The DoD contracting process ensures our taxpayer dollars are spent appropriately to equip our warfighters with the tools necessary to fight and win in an ever-increasingly complex environment. Attempts to undermine that process ultimately put our warfighters at risk,” said Special Agent in Charge Tyler Hatcher, IRS Criminal Investigation. “This most recent indictment against Mr. Soriano and Mr. Thurston is demonstrative of IRS Criminal Investigation’s relentless commitment to supporting national security through partnering on corruption investigations while continuing to pursue those who intentionally evade paying their fair share in taxes, whether their income is legally or illegally obtained.”
Soriano and Thurston are facing several charges, including: conspiracy to commit bribery, which carries a sentence of up to five years in prison and/or a $250,000 fine; bribery, which carries a sentence of up to 15 years in prison and/or a $250,000 fine for a individual or $500,000 for an organization, or three times the monetary equivalent of the thing of value, whichever is greater; and charges of fraud and false statement in tax return, which is an up to 3 year prison sentence and/or a $100,000 fine.
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However, the DOJ emphasized the defendants are considered innocent unless and until proven guilty.
The Defense Criminal Investigative Service, Naval Criminal Investigative Service, Small Business Administration – Office of Inspector General, IRS Criminal Investigation, and the Department of Health and Human Services – Office of Inspector General assisted the U.S. Attorney’s Office, Southern District of California in the investigation.
If you have information regarding fraud, waste, or abuse relating to Department of Defense personnel or operations, contact the DoD Hotline at 800-424-9098.
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