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Ralph Mariano and Mary O’Rourke plead guilty to fraud in NAVSEA case

Former Navy Engineer Pleads Guilty to Organizing and Managing Multi-Million Dollar Fraud Scheme; Associate Admits to Stealing Government Funds

Ralph  Mariano admits to defrauding U.S. Government of between $7 and $20 million  dollars; R.I.  Attorney Mary O’Rourke admits theft of over $200,000 of government funds

(DoJ) – PROVIDENCE,  R.I. – May 30, 2013 – Ralph M. Mariano, of Warwick, R.I., a former senior systems engineer  with the United States Navy’s Naval Sea Systems Command (NAVSEA) in Newport,  R.I., and Washington, D.C., pleaded guilty in U.S. District Court in Providence,  R.I., today to conspiracy and to defrauding the U.S. Government of between $7  million and $20 million by directing co-conspirators to bill the Navy for work  that was never performed, announced Peter F. Neronha, United States Attorney  for the District of Rhode Island.

Mariano  admitted to the court that from 1999 to 2011, he used his position at NAVSEA to  direct Russell Spencer, of  Portsmouth,  R.I., a computer software specialist, to submit millions of dollars in  fraudulent invoices to Navy contractor Advanced Solutions for Tomorrow (ASFT),  a Georgia and Middletown, R.I. company. Mariano admitted to the court that he  directed ASFT to pay Spencer the full amount of the false invoices with money  ASFT received from the Navy. Mariano admitted that the total amount of  government money falsely obtained and paid to Spencer was approximately  $17,957,000. The invoices were processed by Patrick Nagle, Chief Financial  Officer of ASFT.

At  the time of his guilty plea, Mariano admitted to the court that he used a  system of codes to direct Spencer to distribute the government funds to Mariano  and individuals close to Mariano. Mariano admitted that he himself received  $3,081,671 of Navy funds by checks from Spencer. In addition, Mariano admitted  to receiving bi-weekly $3,500 cash payments of Navy funds from Spencer from  2004–January 2011.

Mariano  admitted to the court that little or no work was ever performed by Spencer in  exchange for the government funds Spencer received and distributed at his  direction. According  to information provided to the court, Spencer provided ASFT and its  subcontractors with numerous documents that purported to be work product over  the years. Spencer typically provided ASFT with documents that he had taken  from his employer, Electric Boat, without its consent. Spencer made cosmetic  changes to the documents before submitting them to ASFT.  Despite the fact that Spencer spent very  little time making cosmetic changes to these documents, he billed ASFT upwards  of $200,000 per month.

Mariano  admitted to the court that at his direction, $2,567,028 was paid to his father,  Ralph Mariano, Jr., of North Providence, R.I.; $1,692,650 was paid to his  brother, Joseph Mariano, and to his companies; $207,900 was paid to a  veterinary laboratory company controlled by his sister, Michelle Mariano;  $2,446,445 was paid to private entities controlled by Anjan Dutta-Gupta, of  Roswell, GA, Chief Executive Officer of now defunct ASFT.

In  addition, Mariano admitted to the court that $478,880 in government funds  fraudulently obtained was paid to a company owned by Attorney Mary O’Rourke, of  Warwick, R.I.  O’Rourke pleaded guilty in  U.S. District Court today to one count of theft of government property.  O’Rourke admitted to the court that she submitted false invoices to Spencer  from 2005–2011, and that she was paid with government funds for work that was  never performed.

In  addition to pleading guilty to conspiracy and theft of government funds, Ralph  Mariano pleaded guilty today to one count of tax evasion. Mariano admitted to  the court that from 2006-2009 he failed to report $1,864,910 in income he  received from Russell Spencer. Mariano admitted that he owes the IRS $726,650.

Ralph  Mariano and Mary O’Rourke are scheduled to be sentenced on September 5, 2013,  by U.S. District Court Chief Judge Mary M. Lisi, who presided over today’s  change-of-plea hearings.

Anjan  Dutta-Gupta, who pleaded guilty on April 28, 2011, to one count of bribery, is  scheduled to be sentenced on July 25, 2013, by U.S District Court Chief Judge  Mary M. Lisi.

Russell  Spencer, who pleaded guilty on July 25, 2012, to one count of conspiracy to  commit bribery and on April 19, 2012, to one count of lying to the FBI, is  scheduled to be sentenced on July 25, 2013, by U.S District Court Chief Judge  Mary M. Lisi.

Patrick  Nagle, who pleaded guilty on September 13, 2011, to one count of conspiracy to  commit bribery, is scheduled to be sentenced on July 26, 2013, by U.S District  Court Chief Judge Mary M. Lisi.

Ralph  Mariano, Jr., who pleaded guilty on May 15, 2013 to four counts of tax evasion,  is scheduled to be sentenced on August 16, 2013, by U.S. District Court Chief  Judge Mary M. Lisi.

The  cases are being prosecuted by Assistant United States Attorneys Lee H. Vilker,  Terrence P. Donnelly and Dulce Donovan.

This matter was investigated by agents  from the Defense Criminal Services, Naval Criminal Investigative Service;  Federal Bureau of Investigation; and Internal Revenue Service – Criminal Investigations.     This law enforcement action is part of President Barack  Obama’s Financial Fraud Enforcement Task Force.  The President established  the interagency Financial Fraud Enforcement Task Force to wage an aggressive,  coordinated and proactive effort to investigate and prosecute financial  crimes.

The task force includes representatives from a broad range of  federal agencies, regulatory authorities, inspectors general, and state and  local law enforcement who, working together, bring to bear a powerful array of  criminal and civil enforcement resources.      The task force is working to improve efforts across the  federal executive branch, and with state and local partners, to investigate and  prosecute significant financial crimes, ensure just and effective punishment  for those who perpetrate financial crimes, combat discrimination in the lending  and financial markets, and recover proceeds for victims of financial crimes. (Click HERE for original article)

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