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Posted at 08:21 AM ET, 05/12/2011

Md. family allegedly defrauded NSA of $1.5M

Three members of a Maryland family have been indicted on charges they defrauded the National Security Agency of more than $1.4 million, Maryland U.S. Attorney Rod J. Rosenstein said Wednesday.

A federal grand jury in Baltimore has returned an indictment charging William Turley, 70, of Annapolis; his son, Donald Turley, 53, of Owings Mills; and William’s daughter Christina Turley Knott, 50, of Edgewater.

William and Donald Turley are accused of wire fraud, and Knott Turley is charged with subscribing to a false tax return.

According to the indictment, William Turley owns an Upper Marlboro company which manufactures metal, plastic, and sheet metal parts, and other specialty items for customers, including the NSA, which is located in Fort Meade. William Turley served as president of the firm from 1966 until December, 2008, when he resigned, authorities said.

Donald Turley worked at the company, and was the project manager on the NSA contract. Turley Knott was a bookkeeper at the firm until 2005.

In her job, Turley Knott prepared and submitted invoices to the NSA for labor and materials used to produce products ordered by the agency, authorities said.

According to the indictment, from 1997 until Aug. 1, 2008, the three defendants directed employees to inflate the number of hours they spent working on products for the NSA. They also instructed workers at times to increase the true amount of time they spent working on jobs for the NSA.

The indictment alleges that William and Donald Turley learned that from 2002 through 2005, Turley Knott embezzled about $4.5 million from the company. The Turley men chose not to pursue legal claims against Turley Knott because they feared she would reveal the fraud scheme to the NSA, authorities said.

The indictment alleges the three family members received $1.455,174 in fraudulent payments. The indictment seeks the forfeiture of that amount, as well as homes in Annapolis, Owings Mills, and Palm Beach, Fla.

If convicted, each of the three defendants faces a maximum sentence of 20 years in prison for the alleged conspiracy, prosecutors said. William and Donald Turley both face a maximum sentence of 20 years in prison for wire fraud, and Turley Knott faces a possible maximum sentence of three years in prison for subscribing to a false tax return.

The initial court appearances for the three defendants had not been scheduled as of Wednesday afternoon, authorities said.

By  |  08:21 AM ET, 05/12/2011

 
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