Former GSA Contractor Employee and Four Subcontractors Sentenced in Kickback Scheme

WASHINGTON - A 43-year-old former GSA contractor employee, Charles Anthony Wehausen, was sentenced on Friday, October 31, 2008, before U.S. District Judge Colleen Kollar-Kotelly to 33 months in prison to be followed by three years of supervised release, based on his February 2008 guilty pleas to a charge of conspiracy to commit mail fraud and a charge of income tax evasion, U.S. Attorney Jeffrey A. Taylor, the Honorable Brian Miller, Inspector General, U.S. General Services Administration (GSA), Special Agent in Charge C. Andre' Martin, Internal Revenue Service, Criminal Investigation, and Joseph Persichini, Jr., Assistant Director in Charge, Washington Field Office, Federal Bureau of Investigation, announced today.

Wehausen, 43, of Waldorf, Maryland, was also ordered to pay restitution of $188,941 for losses to the GSA and $55,260 for unpaid taxes to the Internal Revenue Service. The sentence also included an order of forfeiture in the amount of $188,941.

According to the government’s evidence, from 2000 through mid-2003, Wehausen was a Chief Engineer and Project Manager at the Washington, D.C. office of PM Services, Inc., a building maintenance services company, headquartered in St. Petersburg, Florida, which at that time provided building maintenance services for the GSA at the Federal Cohen Building, 330 Independence Avenue, SW, Washington, D.C., and the Federal Switzer Building, 330 C Street, SW, Washington, D.C. Wehausen’s job duties included locating subcontractors to perform more extensive mechanical work outside of the routine maintenance handled by PM Services. He was also responsible for preparing the paperwork necessary to hire and pay the subcontractors. After paying subcontractors for their work, PM Services would obtain reimbursement from GSA.

Wehausen conspired with four subcontractors to artificially and fraudulently inflate job costs listed in purchase orders and invoices. These fraudulent documents were sent to PM Services headquarters in St. Petersburg, where company officials there unwittingly sent excess payments to the subcontractors. The subcontractors, in turn, gave a portion of the excess payments to Wehausen as kickback payments. The total amount of fraudulent payments as a result of the conspiracy was approximately $384,500, a loss suffered by the GSA. Wehausen also evaded the reporting and payment of Federal income taxes on the payments he received from the subcontractors, resulting in losses to the taxpaying public of $55,260.

Prior to this sentencing, Wehausen’s four co-conspirators pleaded guilty to conspiracy charges and were all sentenced by Judge Kollar-Kotelly. They are:

(1) Rene Lillicotch, 50, of Manassas, Virginia, who was an operator of Precision Mechanical Services, a company specializing in commercial mechanical services. On August 7, 2008, Lillicotch was sentenced to 60 days in jail to be served on consecutive weekends, to be followed by 120 days of home confinement as part of 5 years probation. Lillicotch was also ordered to pay restitution to the United States in the amount $84,333. This sentence was based on Lillicotch’s July 25, 2007, guilty plea to one count of conspiracy to commit mail fraud. As part of his guilty plea, Lillicotch admitted that from December 2000 through July of 2003, he participated in the conspiracy by creating and submitting fraudulently inflated invoices and by paying kickbacks totaling over $175,000.

(2) Bahram Shahriari, 46, of Vienna, Virginia, who was the owner of Applied Power Group, a company providing heating, ventilating and air conditioning equipment and technical support. On July 10, 2008, Shahriari was sentenced to 6 months of home detention as part of 5 years probation. Shahriari was also ordered to pay restitution to the United States in the amount of $58,590 and fine of $3,000. This sentence was based on Shahriari’s July 12, 2007, guilty plea to one count of conspiracy to commit mail fraud. As part of his guilty plea, Shahriari admitted that from June 2001 through July 2003, he participated in the conspiracy by working with Wehausen to create and submit fraudulently inflated invoices and by paying kickbacks to Wehausen of over $80,000.

(3) James Baker, 42, of New Windsor, Maryland, who was the owner of Air Specialties, a commercial mechanical services company. On June 26, 2008, Baker was sentenced to 5 years of probation and ordered to pay restitution to the United States in the amount of $32,728 and a fine of $2,000. This sentence was based on Baker’s November 28, 2007, guilty plea to one count of conspiracy to commit mail fraud. As part of his guilty plea, Baker admitted that from October 2001 through July 2003, he participated in the conspiracy by working with Wehausen to create and submit fraudulently inflated invoices and by paying kickbacks to Wehausen totaling over $65,000.

(4) Craig Anderson, 49, of La Plata, Maryland, who was the operator of CA Anderson, a company specializing in mechanical insulation work. On July 22, 2008, Anderson was sentenced to 4 months of home detention as part of 5 years probation. Anderson was also ordered to pay restitution to the United States in the amount of $23,291. As part of his guilty plea, Anderson admitted that from March 2001 through July 2003, he participated in a conspiracy by working with Wehausen to create and submit fraudulently inflated invoices and by paying kickbacks to Wehausen. The kickbacks totaled over $46,500. “Honest services are what the public expects and deserves from its government,” said U.S. Attorney Taylor. “Working together, the law enforcement agencies assigned to this matter did an outstanding job in uncovering an extensive scheme designed to rob the taxpaying public of needed government operating funds and in bringing to justice those persons responsible for this corrosive criminal behavior.”

“These five conspirators overcharged the government and meticulously divided up the proceeds, turning over a large share to Wehausen. The Federal agents successfully penetrated the wall of silence that surrounds criminal conspiracies and the murky world of kickbacks and fraud,” stated GSA Inspector General Miller.

“Prosecuting individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system. Tax evasion is not a victimless crime. Honest, hardworking Americans pay the price when others choose to evade their tax obligations,” stated IRS Special Agent in Charge Martin.

In announcing the sentences, U.S. Attorney Taylor, GSA Inspector General Miller, IRS Special Agent in Charge Martin, and FBI Assistant Director in Charge Perschicini commended the cooperative investigation by Special Agent Gordon Cummings of the GSA Inspector General’s Office, Special Agent James Greczek, of the IRS, Criminal Investigation Division, Special Agents Daniel Damron and John Longmire of the FBI, U.S. Attorney’s Office Auditor Robert Jodoin, Legal Assistants Teesha Tobias and Lisa Robinson, and Assistant U.S. Attorneys John Griffith, Diane Lucas and Sarah Chasson.

Press Releases | Washington Field Office Home