An Army Reserve lieutenant colonel was arrested and charged with laundering money, conspiring to take bribes and violating firearms laws while on active duty, the Justice Department announced yesterday, as part of an ongoing criminal corruption case connected to the reconstruction of Iraq.

Michael Brian Wheeler, 47, of Amherst Junction, Wis., is accused of participating in a bid-rigging scheme in which a contractor and a civilian official of the U.S.-led Coalition Provisional Authority were charged earlier. Wheeler was a civil-affairs officer in Hillah, Iraq, in 2003-04 and is the first member of the military to face criminal corruption charges connected to the rebuilding effort.

Robert J. Stein Jr., who was a CPA comptroller in charge of disbursing $82 million in rebuilding funds in the region south of Baghdad, was charged two weeks ago with accepting $546,000 in illegal payments for steering more than $13 million in contracts to U.S. businessman Philip H. Bloom. Bloom, who was in Romania, was also charged.

In an affidavit supporting the criminal complaint against Wheeler, the government said the two civilians have acknowledged at least some of their role in the alleged plot. Both remain in custody, the Justice Department announcement said.

Wheeler was arrested at his Wisconsin home on Wednesday and is in custody, the announcement said. It noted that the criminal complaint is only a charge and not evidence of guilt. A message left at Wheeler's home was not returned.

Congress appropriated more than $20 billion to help rebuild Iraq. Oversight of that spending was controversial from the start because many contracts were issued without full competition in the rush to repair the country's oil and electricity infrastructure. The charges against Wheeler grew out of an audit conducted by the special inspector general for Iraqi reconstruction.

The government charged that Wheeler and the others stole "hundreds of thousands of dollars in cash" from coalition funds and that he smuggled some of it back into the United States. He allegedly used $58,000 of $100,000 in cash he carried back into the country to buy a variety of "high-end tools" from a Wisconsin fire-alarm company.

The affidavit also alleges that Wheeler used $69,620 in CPA funds to buy four dozen firearms, including grenade launchers and machine guns. The weapons were supposed to be shipped back to Iraq for the personal protection of coalition employees but were not.

According to the charges against Wheeler, a "co-conspirator" identifiable as Bloom transferred the cash for firearms to a gun manufacturer in Charlotte and was repaid with CPA funds supplied by a "co-conspirator" who meets Stein's description. The weapons were then shipped to the 3rd Special Forces Group at Fort Bragg, where Wheeler picked them up, claiming they were a "federal law enforcement sales order," the affidavit claims. Instead of shipping them back to Iraq, the affidavit claims, Stein gave Wheeler two .45-caliber pistols and two submachine guns and kept the rest of the weapons in his garage near Fayetteville until they were seized in a search of his home two weeks ago.

Wheeler has been in the military since June 1979 and is a civil-affairs specialist, according to a spokesman for the Army Human Resources Command in St. Louis. He is assigned to the 84th Division in Milwaukee but is not currently on active duty, another Army official said.

The colonel has been a firefighter and paramedic for the Stevens Point Fire Department near his home in Wisconsin since mid-1999 and returned from active duty in January, Mark Barnes, chief of the department, said in an interview yesterday. Barnes said he was surprised by the charges.

Stein pleaded guilty in 1996 on federal fraud charges, was sentenced to eight months in prison and was ordered to reimburse $45,000 to a financial institution. Despite that, he was hired in 2003 by S&K Technologies Inc. of Montana, a Native American company that had a $5 million Army contract to provide a broad range of subject-matter experts to the CPA. Greg DuMontier, president and general manager of the company, said Stein's expertise was construction and he doesn't know why he was acting as a comptroller.

Staff researcher Richard Drezen contributed to this report.