A former US air force master sergeant who called himself 'Al Capone' has pleaded guilty to defrauding the military out of $37m through a nine-year bid-rigging scheme involving IT contracts with the Pentagon.
Alan Hayward James, 51, from Texas, admitted to conspiracy to commit wire fraud, bribery, and rigging bids for contracts with the US Pacific air forces based in Hawaii. The scheme, which began in April 2016, involved inflating contract values and funneling excess funds to himself, his family, and co-conspirators.
According to the US Department of Justice, James conspired with multiple competitors to manipulate bids, encouraging some companies to overbid and others to underbid. In one instance, he told a company to submit a 'low and stupid' bid, ensuring a co-conspirator won the contract at an inflated rate.
Money from the scheme was distributed through shell companies and false salaries, including payments to family members. A ledger obtained by authorities showed payments to an individual referred to as 'Godfather', and to James's parents, listed as 'Capone M' and 'Capone D'. James used government funds to pay for a luxury resort stay for co-conspirators in Hawaii, including golf, horseback rides, and massages.
James has agreed to pay restitution of at least $1,451,656.80 to the Department of Defense. He faces up to 45 years in prison, though a lighter sentence is expected due to his guilty plea.
