Former Coalition Official Sentenced in Fraud Case

A former official of the U.S.-led Coalition Provisional Authority was sentenced yesterday to nine years in prison and ordered to forfeit $3.6 million for his role in one of the largest fraud schemes to emerge from the reconstruction of Iraq, the Justice Department said yesterday.

Robert J. Stein, 52, of North Carolina was arrested in November 2005 and pleaded guilty in February 2006 to charges that included bribery, money laundering and conspiracy. He was sentenced in U.S. District Court in Washington.

In his role as comptroller and funding officer for the Coalition Provisional Authority in south-central Iraq, Stein worked with other Defense Department officials to rig the bids on reconstruction contracts so that all the work went to American businessman Philip H. Bloom, according to prosecutors. In exchange, Bloom gave the officials more than $1 million in cash, plus such luxury gifts as SUVs, a motorcycle, jewelry, computers, airline tickets, liquor and promises of future employment.

Prosecutors also say Stein and other members of the scheme stole $2 million in reconstruction funds, and that Bloom laundered the money before giving it back to Stein and his co-conspirators. Bloom, who has pleaded guilty and is scheduled to be sentenced in February, received more than $8.6 million in what prosecutors said were rigged contracts. Another official, Army Reserve Lt. Col. Bruce D. Hopfengardner, has also pleaded guilty in connection with the scheme.

The Justice Department said yesterday that Stein has cooperated with the government's investigation.

"The Department of Justice will protect the integrity of the federal contracting process by aggressively prosecuting fraud, bribery and other crimes that taint missions as critical as the reconstruction of Iraq," Assistant Attorney General Alice S. Fisher said in a statement.