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Couple in DoD fraud case get jail time

Feb. 17, 2014 - 02:32PM   |  
By SEAN REILLY   |   Comments

A Tennessee couple will do time in federal prison for conspiring to defraud the military on vehicle parts purchases in Afghanistan, according to the Justice Department.

Keith Johnson will serve 30 months in prison; his wife, Angela, six months, followed by another six months of house arrest, the department said in a Feb. 14 news release announcing the sentencing in U.S. District Court in Alexandria, Va. The Maryville, Tenn. couple, who had agreed in November to plead guilty to conspiracy to commit wire fraud, was also ordered to forfeit more than $2 million.

The scheme evolved in 2007 and 2008 when Keith Johnson was working as a program manager for a Defense Department maintenance contractor in Kabul. The contractor was PAE Government Systems, a subsidiary of Lockheed Martin, according to a Defense Criminal Investigative Service document included in court records.

The couple created a Tennessee firm, Military Logistics Support (MLS), operated by Angela Johnson. When Keith Johnson’s employer in Afghanistan sought quotes for vehicle parts, Angela Johnson — using her maiden name of Angela Gregory — replied with quotes based on purchases from other vendors. Keith Johnson then used his post as program manger to steer the business to MLS, which ultimately received more than $11 million worth of orders, according to the release.

The Johnsons also conspired with two other men — John Eisner and Jerry Kieffer — who worked as subcontractors to Keith Johnson’s employer in Afghanistan to steer buys for other types of vehicle parts to their company, Taurus Holdings, according to the Justice Department. U.S. District Judge Leonie Brinkema sentenced Eisner and Kieffer in December to one year and six months in prison respectively for their role in the scheme.

In a lengthy statement addressed to Brinkema included in the court record, Keith Johnson acknowledged failing to disclose Angela Johnson’s involvement with MLS, but said that Eisner and Kieffer had threatened him and his family if he did not continue channeling business to Taurus. “The truth is that I should have stood up to them but I didn’t,” Keith Johnson wrote, adding that he should have revealed his wife’s role in MLS. “If I had just played it straight, none of this would have happened,” he added. “But I didn’t and it did.”

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