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Navy stops work by contractor involved in alleged kickback

Mar. 15, 2011 - 06:00AM   |  
By SARAH CHACKO   |   Comments
The Navy has stopped all work with a Georgia firm that is accused of participating in a kickback scheme involving $10 million in Navy funds. Navy Secretary Ray Mabus terminated all existing contracts on March 3.
The Navy has stopped all work with a Georgia firm that is accused of participating in a kickback scheme involving $10 million in Navy funds. Navy Secretary Ray Mabus terminated all existing contracts on March 3. (MC2 Kevin S. O'Brien / Navy)

The Navy has stopped all work with a Georgia firm that is accused of participating in a kickback scheme involving $10 million in Navy funds.

The criminal complaint was entered against Advanced Solutions for Tomorrow Inc. in the U.S. District Court in Rhode Island on Feb. 8. Naval Sea Systems Command spokeswoman Patricia Dolan said the contractor was indefinitely suspended from new contracts on Feb. 11, but Navy Secretary Ray Mabus took the unprecedented step of terminating all existing contracts on March 3.

"It shows that the secretary will act swiftly to protect the interests of the Navy when criminal charges are filed against a contractor," Dolan said.

The criminal complaint and supporting affidavits allege that Ralph Mariano, a civilian program manager and senior systems engineer with Naval Sea Systems Command (NAVSEA), and Anjan Dutta-Gupta, founder and president of Advanced Solutions for Tomorrow (ASFT), participated in a kickback and bribery scheme in which Dutta-Gupta funneled approximately $10 million to Mariano, Mariano's relatives and Mariano's associates in return for Mariano's role in funding Navy contracts to ASFT.

According to the affidavit, approximately $13.5 million in Navy funding was sent by ASFT to a subcontractor, mostly for work that was not performed. The subcontractor, over a period of years, allegedly kicked back approximately $10 million to Mariano, Mariano's relatives and associates, and to entities controlled by Dutta-Gupta.

Advanced Solutions was providing various engineering and technical services for submarine combat and command-and-control systems support to the Naval Undersea Warfare Center, Newport, R.I., Division, according to a NAVSEA news release. Other terminated contracts were for research of unmanned undersea vehicle capability, and the design and development of combat systems.

Dolan did not have details about the value of the contracts or how the work would be continued, but said it would likely depend on the necessity of the work and if other contractors were also working on those projects.

Mariano, in his work for NAVSEA, directed contracting officers to issue task orders through modifications on existing contracts, according to a news release from the U.S. Attorney's office in Rhode Island. Mariano was also responsible for evaluating proposals during solicitation and bidding for new contracts.

Dolan said she could not provide Mariano's employment status because it would be a violation of the privacy act.

Both Mariano and Dutta-Gupta are free on bond.

A review team appointed by the Naval Sea Systems commander is trying to determine how the scheme operated and will recommend ways to prevent future fraud, according to the release.

Calls to Advanced Solutions for Tomorrow for comment were not returned Monday.

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