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2 Indicted in Navy Contract Kickbacks

Monday, July 15, 2013

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Two former executives of Navy contractors are facing decades in prison after charged in a kickback scheme that allegedly traded bribes for Navy subcontracts.
 
William Wellington Hooper, Jr., 46, of Virginia Beach, VA, and Harry Siegfried Rahn, Jr., 52, of San Francisco, CA, were indicted Wednesday (July 10) by a federal grand jury on charges of conspiracy, giving and accepting kickbacks relating to government contracts, wire fraud, and false statements, the Justice Department reported.
 
If convicted, Hooper and Rahn both face up to five years in prison for conspiracy, 10 years on each count of illegal kickbacks, 20 years on each count of wire fraud, and five years for false statements.

The defendants netted more than $641,000 from the scheme, authorities said.

Steel America
Steel America

The kickbacks allegedly followed William Hooper Jr. to a second position at Steel America, a division of Colonna’s Shipyard Inc. in Norfolk, VA.

The indictment, filed in U.S. District Court for the Eastern District of Virginia, details one count of conspiracy, 18 counts of providing and acceptance of kickbacks, 11 counts of wire fraud, and one count of false statements against each defendant.

Both men are scheduled to be arraigned July 24.

The Players

The scheme allegedly dates to mid-2010, several months after Hooper went to work as a manager at Oceaneering International, Inc. (OII) of Chesapeake, VA, the Justice Department said..

The company is a global oilfield provider of engineered services and products, primarily to the offshore oil and gas industry, with a focus on deepwater applications, according to its site. The company also serves the defense and aerospace indutries.

Hooper joined the company in April 2010.

Rahn, meanwhile, is the longtime president of Rahn Systems International (RSI), a manufacturing, fabrication and systems integration company that serves the military, marine, aerospace and commercial markets.

Hooper and Rahn were longtime acquaintances, the Justice Department said.

The Plan

In July 2010, the indictment said, the Naval Sea System Command (NAVSEA) awarded a cost-plus fixed fee contract to Oceaneering International. The contract inovlved Deep Submergence Systems and Dry Deck Shelters. Hooper was the Dry Deck Shelter Planning Yard Manager at Oceaneering.

Rahn Systems International
Rahn Systems International, LLC

Defense contractor Rahn Systems International is a manufacturing and fabrication company. President Harry B. Rahn is accused of paying kickbacks to get Navy subcontracts.

Two weeks later, Rahn registered his company in San Francisco, with Rahn serving as the owner.

Between that time and December 2012, the indictment said, Rahn paid Hooper about $72,000 in kickbacks, "much of which was related to military contracts," the Justice Department said.

Shortly thereafter, Hooper began recommending the new subcontractor, RSI, for work related to the NAVSEA contract.

"Between August and December 2011, Rahn mailed 21 U.S. Postal money orders totaling over $18,000 to Hooper and to Hooper’s landlord in Virginia Beach," authorities said.

Sometime before November 2011, meanwhile, Hooper left Oceaneering to become Director of Fabrication for Steel America, a division of Colonna’s Shipyard Inc. in Norfolk, VA. The Justice Department did not say why Hooper changed jobs.

Oceaneering International

The case began shortly after Oceaneering International received a NAVSEA contract in July 2010. A since-departed company manager is accused of taking kickbacks from a subcontractor. The company is not accused of wrongdoing.

Once at Steel America, however, Hooper again began recommending subcontracts to RSI, primarily on Colonna’s commercial contracts.  While at Steel America, RSI wired over $58,000 in 11 money wire transactions to a bank account Hooper opened in February 2012.

Investigators from the Defense Criminal Investigative Service (DCIS) and the Naval Criminal Investigative Service (NCIS) began questioning Hooper about irregularities and extra income in November 2012. He resigned from Steel America a month later.

The indictment alleges that Hooper obtained his positions at Oceaneering and Colonna's (Steel America) "to obtain United States Government prime contracts and subcontracts, as well as commercial contracts, and thereafter awared subcontracts to RSI...."

Furthermore, the indictment says, RSI subcontracted out pieces of the Oceaneering work to other companies, "which gave the impression that these companies were part of RSI."

The scheme was supported in part by 185 telephone calls between Rahn and Hooper from July 6, 2010, to July 16, 2011, the indictment says.

   

Tagged categories: Enforcement; Government contracts; Marine; Shipyards; Steel; Subcontractors; U.S. Navy

Comment from WAN MOHAMAD NOR WAN ABDUL RAHMAN, (7/15/2013, 6:30 AM)

NO LAW IN THIS WORLD CAN COPE WITH THIS KIND PROBLEM EXCEPT THAT MANKIND KNOWS HE IS ANSWERABLE TO THE ALMIGHTY IN THE DAY OF JUDGEMENT.


Comment from Mark Anater, (7/15/2013, 11:20 AM)

I'm not going to get into questions about the nature of God on this forum, but suffice it to say that we can't wait around for him to act when contractors defraud the government. Imperfect as our criminal justice system may be, it's the best solution we have, and these guys are about to pay a big price for their actions.


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