By Del Quentin Wilber and Nikita Stewart
Washington Post Staff Writers
Friday, March 13, 2009
A D.C. government official and a business executive were arrested yesterday on bribery charges involving city technology contracts that included "ghost" workers and kickbacks, federal authorities said.
Raiding offices in the hunt for documents, FBI agents carted away boxes and envelopes throughout the day from the Office of the Chief Technology Officer, the center of the alleged fraud.
In court documents released yesterday, FBI agent Andrew Sekela laid out the complicated and audacious schemes allegedly orchestrated by a mid-level manager who approved many contracts involving the city government's technology needs.
Authorities said the conspiracy was uncovered with the help of a D.C. government employee who recorded conversations with the executive and the city official.
The ultimate cost to the city is not known, but the disclosure comes as it is trying to recoup its losses from an embarrassing tax swindle that siphoned almost $50 million from its coffers over almost two decades.
Until recently, the technology office was headed by Vivek Kundra, who has taken a job as President Obama's chief information officer. A White House official confirmed last night that Kundra has taken a leave of absence.
Mayor Adrian M. Fenty (D) said he was unaware of the technology office investigation until yesterday's raid and arrests. He said the city will "cooperate fully" with the probe.
Yusuf Acar, 40, who has worked in the technology office since 2004, was charged with bribery, conspiracy, money laundering and conflict of interest. Assistant U.S. Attorney Thomas Hibarger told a federal judge that Acar is a flight risk because agents seized $70,000 in cash in his house and because in recorded conversations, he boasted that he could easily flee to his native Turkey. Acar also told the informant that he could use computers to create fake D.C. birth certificates, Hibarger said.
U.S. Magistrate Judge John M. Facciola ordered the Northwest Washington resident held without bond until a hearing Tuesday. At least three other D.C. employees who have not been charged were involved in varying degrees, Sekela alleged.
Sushil Bansal, 41, president and chief executive of the contracting firm Advanced Integrated Technologies Corp. (AITC), was charged with bribery and money laundering. He was released on personal recognizance. Federal agents said Bansal's company received more than $13 million in revenue from the D.C. government in the past five years.
Bansal's attorney, David Lamb, declined to comment. Dani Jahn, a public defender who represented Acar yesterday, also declined to comment.
The technology office is one of two city agencies that are given some leeway in purchase orders. It can dole out noncompetitive orders up to $500,000, compared with a $100,000 limit for other agencies. Acar was one of about 50 managers in the technology office, which has a $69 million budget, 300 employees and 300 contractors.
Federal authorities said the conspiracy, which operated for at least a year, worked like this:
Acar approved work with a vendor, such as Bansal's AITC, to arrange the purchase of goods such as software. The vendor ordered fewer items but billed the District for a larger amount. Bansal, Acar and others then split the proceeds, FBI officials said.
Acar also approved fraudulent time sheets for nonexistent employees, Sekela wrote. Acar and the others split the proceeds paid by the D.C. government, Sekela alleged.
Authorities traced more than $200,000 in payments last year from Bansal's firm to a private company, Circle Networks Inc. The firm is co-owned by Acar, even though he is prohibited from having an interest in any company doing business with the city, Sekela wrote. Circle Networks generated about $2.2 million in revenue through D.C. government contracts, the agent wrote.
Owner Daris Lewis said he had bought out his former partner in Circle Networks several years ago. "I'm a small, veteran-owned business," he said, adding that he did nothing inappropriate. "I don't have anything to do with it."
FBI agents also alleged that Bansal's firm issued $70,201 in checks to Acar's wife, Galen, in 2006 and 2007.
The scam began unraveling in March last year when Acar recruited an unidentified D.C. government employee, an Army veteran who has a master's degree in electrical engineering, FBI agents wrote.
Over drinks one Friday after work, Acar told the employee about the bribery and kickback operation and how it worked, Sekela wrote. The informant approached the FBI and began wearing a hidden recording device and secretly recording phone conversations involving Acar and Bansal.
During a December conversation, Sekela wrote, Acar and the informant discussed what could happen if they were caught. "No, nothing," Acar told the informant, according to a transcript of the call. "I will jump on the next plane, go to Turkey and disappear."
The pair also discussed how they should split money and haggled over their share. After a software deal went through, the FBI agent wrote, the informant received $8,247 from Bansal's company. In late January, Bansal showed up at the informant's office and gave him an envelope stuffed with $3,520 in cash because Bansal and Acar had decided to boost his share of the proceeds, Sekela wrote.
Last month, Sekela wrote, Acar intercepted an e-mail from the D.C. Office of Inspector General. He told the informant in a taped conversation that he had set up a computer system to intercept e-mails that mentioned his name and others, according to Sekela.
Sekela did not disclose what was in the e-mail, but something apparently was worrying Acar.
"Are we going to jail?" he asked the informant.
Staff writers Hamil R. Harris, Dan Keating, David Nakamura, Elissa Silverman and Scott Wilson and researcher Meg Smith contributed to this report.