$9 Million Contracts Scheme in Prince William, Va., Leads to Firings, FBI Probe

By Jennifer Buske and Josh White
Washington Post Staff Writers
Saturday, May 30, 2009

Three Prince William County government employees have lost their jobs over allegations that they were involved in a long-running scam to steer millions of taxpayer dollars to specified contractors. Sources close to the investigation called it one of the largest embezzlement and fraud cases in county government history.

Employees in the Prince William Office of Information Technology are accused of manipulating the county's bidding process to funnel about $9 million in contracts to certain vendors over the past few years, sources close to the investigation said.

Officials could not say exactly how much of the county's money was stolen or misused, because some of the contract work was performed for the county in return for payments. Officials are looking into how the contracts were executed and whether anyone personally benefited from the alleged scheme.

Prince William police and the FBI began investigating the allegations about a month ago, after a county employee approached officials about apparent problems inside the information technology department, which maintains and supports the county's network of computers, databases and telephones. Sources said the police, working with the county's internal audit office, are close to wrapping up their investigation. The sources spoke on condition of anonymity because of the investigation.

Investigators are looking into "massive false billings," bid-rigging and collusion between county employees and outside vendors, said Corey A. Stewart (R), chairman of the Prince William Board of County Supervisors. He said the FBI is involved because about $90,000 in federal grants were allegedly tied into the scheme.

Authorities are also looking into the possibility that profits from the alleged scam were sent overseas.

At least two local vendors are involved, Stewart said. A former county employee who left public service in January last year has been implicated with the three employees who were recently terminated, he said.

Maneesh Gupta, former assistant chief information officer, was one of the terminated employees and has been a target of the investigation, sources said. Gupta -- who at times served as a contract manager -- oversaw the office's purchase orders, time sheets and invoices, all documents used to track the office's expenses and services.

"I'm disgusted at the lack of oversight and mismanagement," Stewart said. "If it is true that one person was in charge of all three oversight functions, then that is clearly mismanagement."

Robert Trout, a Washington lawyer representing Gupta, said his client has been cooperating with authorities. Trout declined to provide further information but said Gupta had voluntarily approached police about the alleged scheme.

Liz Bahrns, the county's spokeswoman, has said she can't quantify the losses or provide details about the situation because of the investigation. Citing the investigation, Prince William officials have declined to make public an accounting of the county's information technology contracts and services despite a Washington Post Freedom of Information Act request.

In internal e-mail messages, provided to The Post in response to a formal request, County Executive Craig S. Gerhart expressed frustration at the situation. In a May 1 e-mail, Gerhart wrote that Prince William staff should remember the county's "vision and values" and pledge support to those who continue to work in tech office. "I know that it is difficult to believe that our co-workers would be involved in wrongdoing," he wrote. "It has been difficult for me, personally, to come to grips with the fact that people I trusted would betray that trust."

One information technology employee, who spoke anonymously because employees were directed not to talk to the news media, said this week that office members were "shocked" by the allegations and felt that such a violation of public trust, if affirmed, should be punished.

Staff researcher Meg Smith contributed to this report.

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