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Government and People
|AFFIDAVIT IN SUPPORT OF
APPLICATION FOR ARREST WARRANT.
I, Andrew Sekela, Special Agent, Federal Bureau of Investigation (FBI), being duly sworn, depose and state as follows:
1. As a Federal Agent, I am authorized to investigate violations of the laws of the United States of America and I am a law enforcement officer with authority to execute arrest and search warrants issued under the authority of the United States of America.
2. Your Affiant has been a Special Agent (SA) with the FBI, Washington Field Office, for approximately five years, and been assigned the responsibility for conducting white collar crime investigations since July 2004. White collar crimes are considered by the FBI to be those illegal acts characterized by fraud, concealment, or a violation of trust and which are not dependent upon the application or threat of physical force or violence. I have received formal and informal training regarding the conduct of white collar crime investigations. Since 2004, I have been assigned as case agent on numerous white collar crime investigations involving violations of Federal law which include, but are not limited to, public corruption, government fraud, antitrust violations, bribery, and conspiracy.
3. The information set forth in this affidavit is known to your Affiant as a result of investigation personally conducted by him and/or by others and related to him.
4. The statements contained in this Affidavit are based in part on information provided by Special Agents (SA’s) and other employees of the FBI; SA’s from the DC Office of the Inspector General (OIG); and Criminal Investigators responsible for Internal Security matters from the DC Office of the Chief Financial Officer (OCFO), Office of Integrity & Oversight (OIO). Statements are also based in part on review of records and documents gathered during the course of the investigation, interviews, consensually recorded conversations, surveillance, and on my experience and background as a Special Agent of the FBI.
5. Because this affidavit is being submitted for the limited purpose of establishing probable cause to obtain search and arrest warrants, I have not set forth each and every fact learned during the course of the investigation. In addition, where conversations or statements are related herein, they are related in substance and in part except where otherwise indicated.
B. Request for Arrest Warrant
6. This affidavit is respectfully submitted in support of applications for the issuance of arrest warrant for the following person:
YUSUF ERKAN ACAR, date of birth: xxxxxxx, 1968; Social Security Account Number xxx-xx-5869;
7. The facts and circumstances set forth in this affidavit demonstrate that there is probable cause to believe that YUSUF ACAR has committed violations of Title 18, United States Code (U.S.C.), Sections 201, 371 (Conspiracy to Commit Bribery), Sections 1343 and 1346 (Honest Services Wire Fraud), Section 208 (Conflict of Interest), and Section 1956 (Conspiracy to Commit Money Laundering).
C. Overview of the Investigation
8. There is probable cause to believe that YUSUF ACAR, SUSHIL BANSAL, and others are involved in committing and in conspiring to commit the following offenses: bribery, honest services wire fraud, conflict of interest, money laundering and other offenses, which involve stealing money from the District of Columbia (DC) Government through a variety of schemes. Two of the schemes, more fully described below, are as follows: In one scheme, a quantity of goods is ordered by OCTO from a vendor such as Advanced Integrated Technologies Corporation (AITC). The vendor actually orders a lesser number of the item from the distributor, but bills the DC government for the full amount originally requested by OCTO. An OCTO official, such as YUSUF ACAR, falsely certifies that the greater quantity was actually received and the vendor bills the District of Columbia Government for the greater amount and is paid accordingly. The co-conspirators then split the proceeds of the crime. A second scheme involves billing for "ghost employees". These are contract employees supposedly hired by a vendor, such as AITC, to perform work under a specific contract for OCTO. However, these ghost employees never actually perform any work under the contract. The vendor, who is involved in the scheme, bills the DC government for the employees' hours. An OCTO official, such as YUSUF ACAR, approves the timesheet so that the vendor can be paid. The money is then split between the co-conspirators.
D. Background information
9. YUSUF ERKAN ACAR was born on XXXXXXX XX, 1968 in Turkey and has Social Security Account Number XXX-XX-5869. ACAR, and his wife, G.A., live at XXXX XXXXX XXXXX XXXX NW, Washington, DC 20008-1005. ACAR is employed by OCTO as an IT Specialist (Security), and is a Government Service (GS) Grade 16 with an annual salary of about $127,468. He is currently serving as the Acting Chief Security Officer. He has worked for the DC Government since December 2004. One of ACAR’s duties is to purchase software and hardware for the District of Columbia’s technology infrastructure. He is also responsible for securing the services of contract employees to fill various personnel needs across numerous DC government agencies. In a recorded conversation on December 10, 2008, YUSUF ACAR states in part, regarding the risk of getting caught, “I mean, I will jump on the next plane, go to Turkey and disappear. That’s fine.” YUSUF ACAR has also stated that he is trying to move approximately $200,000 in cash out of the country to Turkey via diplomatic pouch.
10. On May 14, 2008, ACAR signed and filed a Confidential Statement of Employment and Financial Interests, on which he indicated that neither he nor any members of his immediate household had any connections or financial interests to any business enterprises. In addition, he indicated that he was not affiliated with any business entities that do business with the DC government. ACAR is associated with a company called CIRCLE NETWORKS, INC. (Circle), as set forth below. While Circle’s last purchase order with OCTO was dated May 30, 2008, ACAR remains associated with Circle and he apparently is in control of a Circle bank account, as set forth below, that receives deposits from AITC, owned by co-conspirator SUSHIL BANSAL. 10. SUSHIL BANSAL was born on XXXXX XX, 1967 in India and has Social Security Account Number XXX-XX-7118. BANSAL and his wife, A.B., reside at XXXX XXXXXX XXXX XXXX, XXXX XXXXXX, VA 22027. BANSAL is a former DC government employee. BANSAL is the President and Chief Executive Officer of AITC. His wife, A.B., is listed on bank account documents as a Corporate VP of AITC. BANSAL is also an officer of Innovative IT Solutions, Inc. (IITS). In 2008 alone, AITC initiated international wire transfers from its Wachovia Bank account to a bank in India totaling over $200,000. BANSAL's 2007 tax returns included a home address given as XXXX XXXXXX XXXX XXXX, XXXX XXXXXX, VA 22027. These documents were filed with the District of Columbia for a renewal application of AITC to be a Certified Business Enterprise (CBE). On February 25, 2009, a FBI surveillance team observed BANSAL in the vicinity of his house at approximately 5:12 PM driving a vehicle with Virginia license plate SARANGA. According to DMV records, this vehicle is currently registered to Sushil K. Bansal and [A.B.], XXXX XXXXXX XXXX XXXX, XXXX XXXXXX, VA 22027. On March 2, 2009 a FBI surveillance team observed BANSAL leaving his house at XXXX XXXXXX XXXX XXXX and, after two stops, arriving at the business address of AITC.
11. Advanced Integrated Technologies Corporation (AITC) -- AITC is a Certified Business Enterprise (CBE) in the District of Columbia according to the Department of Small and Local Business Development. AITC recently moved to office space at 1707 L Street NW, Suite 250 Washington, D.C. 20036. According to publicly available records of District of Columbia purchase orders, between March 2004 and February 6, 2009, AITC did over $13 million in business with the DC government, primarily with OCTO. By way of information, AITC’s website (www.aitc.net) lists the following office in India: AITC Consulting Pvt. Ltd., 219 Tower “A” The Corenthum, A-41 Sector 92, Noida UP 201301.
12. Innovative IT Solutions, Inc. (IITS) -- IITS is a Certified Business Enterprise (CBE) in the District of Columbia according to the Department of Small and Local Business Development. IITS recently moved to office space at 1707 L Street NW, Suite 260 Washington, D.C. 20036. Before moving to this new space, AITC and IITS were located in different suites on the same floor of a different office building in D.C. The sub-lease for IITS’s office in the previous location was entered into by AITC. In addition, bank records show that AITC paid the rent for IITS at the previous location beginning in February 2007. According to publicly available records of District of Columbia purchase orders, between July 2008 and November 2008, IITS did approximately $220,000 in business with the DC government.
13. Circle Networks, Inc.
14. D.L., as noted above, is an owner/officer of Circle Networks, a company that is also associated with YUSUF ACAR, and appears to be involved in laundering the proceeds of the criminal schemes set forth herein. According to information D.L. provided to Sun Trust bank and to Navy Federal Credit union for the Circle Network accounts, as well as for a personal account at Sun Trust, he resides at XXX XXXXXXXXXX XX., XX, Washington, DC 20011. The Articles of Incorporation for Circle Networks provided to Navy FCU, dated April 29, 2000, list D.L. as the sole member of the board, the incorporator, and the registered agent, all listing the XXX XXXXXXXXXXX XXXXXXX address. According to representations from the U.S. Postal Service, Circle Networks currently receives mail at that address.
15. ALLNET Systems, Inc. (ALLNET) and S.E. -- S.E. is currently employed by the District of Columbia Office of the Chief Technology Officer and has been so employed since June 12, 2006. According to records obtained from the Bank of America, ALLNET opened a business economy checking account on or about September 29, 2005. On the corporate signature card, S.E. is listed as the President of ALLNET. As part of the ongoing criminal conspiracy, ACAR has been attempting to have a company he can control certified by the Department of Small and Local Business Development to do business with the District of Columbia which would require, among other things, the company to have an address in the District of Columbia. On or about January 16, 2008, ALLNET Systems, Inc. opened an account at Wachovia Bank. On a signature card for this account, dated January 16, 2008, A.S. is listed as the CEO, and the address for ALLNET is listed as 1701 Pennsylvania Avenue NW. The Cooperating Witness (CW) has been present for conversations in which ACAR has discussed with S.E. a plan to have ALLNET certified to further their criminal scheme and, on October 18, 2008, ALLNET submitted an on-line application to the Department of Small and Local Business Development listing the address as 1306 9th Street NW, Washington, DC, 20001. The two most recent statements I have reviewed for the Allnet account at Wachovia, ending October 31, 2008 and November 28, 2008, list 1306 9th Street, NW, Washington DC 200014208 as the address for Allnet. I have reviewed a letter dated November 8, 2008, which bears the signature of Z.F., the registered owner of the property at 1306 9th Street NW. The letter indicates that Z.F. is sharing space at this address with Allnet. On March 5, 2009, an investigator with the D.C. Office of the Inspector General contacted Z.F. Z.F. confirmed that Allnet had property, including computers, at 1306 9th Street NW.
16. Network Osiris and F.A. -- F.A. is currently an employee of the District of Columbia Office of the Chief Financial Officer (OCFO). According to bank records F.A. and his wife, S.A., are Officers for Network Osiris. F.A. worked at OCTO as a contractor beginning in December 2002, and became a full-time government employee at OCTO in or about April 2006. F.A. assumed his current position at OCFO in January 2007. YUSUF ACAR told the CW that ACAR and F.A. used to work together on the procurement of equipment and software licenses, including procurements that involved criminal activity like the schemes in which ACAR and CW are involved (e.g., receiving a lower quantity of items than were actually paid for). ACAR and F.A. generally divided their territory and kept their activities separate, that is, ACAR dealt with contractors, and F.A. dealt with equipment. However, there were times when they worked together to steal money. CW heard that F.A.’s wife had been used as part of a “ghost employee” scheme. Bank records show that F.A. and S.A. both received payments from AITC via direct deposit into an account in the name of Network Osiris from October 2005 to April 2007. Initially the direct deposits from AITC to Network Osiris were sent with F.A.’s name and in August 2006, shortly after F.A. became a government employee, they began to be sent in S.A.’s name. In 2006, Network Osiris issued fifteen (15) checks to G.A., wife of YUSUF ACAR, totaling $43,755.00. The memo line read “IT Consulting Services.” All checks to G.A. were drawn by F.A. Four checks were issued to S.A. from October 2005 to April 2006 totaling $55,000.00. The memo line read “IT Consulting Services.” According to the Virginia State Corporation Commission (VSCC), Network Osiris was incorporated in October 2000. S.A. is listed as the CEO and President. Incorporation documents filed with the VSCC list the address for Network Osiris as XXXXX XXXX XXXXXXX XX, XXXXX XXXXXX, VA 20152. As of November 3, 2008, Network Osiris’s charter is still valid, although the company is delinquent on its charter fee. Network Osiris maintained a bank account at Greater Atlantic Bank between August 28, 2002 and July 9, 2008 when the account was closed. The signature card for the account shows S.A. and F.A. as authorized signers for the account. The address for Network Osiris is listed as XXXXX XXXX XXXXXXX XX, XXXXX XXXXXX, VA 20152-3628. The last statement for this account, from July 31, 2008, lists the same address.
17. T.S. has been an employee of OCTO since on or about September 17, 2007. Prior to that, T.S. worked at OCFO from approximately August 1998 to February or March 2000. She then worked at OCTO from approximately February or March 2000 until December 2004. She later worked as a contractor with a private company from approximately February 2005 until September 2007, at which time she became a full- time employee at OCTO. Among other responsibilities, T.S. processes invoices from contractors and vendors for payment. T.S. is believed to process invoices that are part of this criminal conspiracy, knowing that they are false. In a telephone conversation on December 10, 2008, recorded by the CW [all of the telephone conversations set forth herein were recorded pursuant to the consent of the CW], ACAR and the CW discuss T.S. Excerpts of that conversation are set forth below:
18. W.M. has been an employee of OCTO since on or about February 2008. W.M. is an IT Specialist (Security), and is a Government Service (GS) Grade 15 with an annual salary of about $101,000. In this position, he is in charge of Security Systems and Engineering. He is actively involved in the selection and purchase of technology equipment for OCTO and the agencies it supports. He reports to the Information Security Officer (ISO), making recommendations on both vendor selection and equipment purchases. W.M. therefore reports to ACAR who is the Acting ISO. CW has observed equipment on site at OCTO that appears to have been ordered with W.M.’s knowledge before a Purchase Order requisition was issued. ACAR told CW that he has purchased goods, such as used or refurbished goods, for OCTO from non approved sources such as the internet. ACAR has intimated that W.M. is involved and aware of these purchases.
19. The Cooperating Witness (CW) -- The CW is also an employee of OCTO. In April 2008, CW reported to the FBI that ACAR had approached him about joining in the criminal activity taking place at OCTO. CW agreed to actively work with the FBI as a cooperating witness. CW does not have an arrest record and does not have a pending criminal case. He served approximately eight years in the United States Army and was honorably discharged. He holds a Master’s Degree in Electrical Engineering. He works closely with YUSUF ACAR as part of his legitimate duties at OCTO and, in his role as a seeming coconspirator, has gained the trust of and has come to work closely with both YUSUF ACAR and SUSHIL BANSAL in their criminal schemes. The information provided by the CW during the course of this investigation has always proven to be reliable.
E. THE LEGITIMATE CONTRACTING PROCESS
20. The District of Columbia (DC) Government routinely issues purchase orders to vendors for a wide variety of goods and services. When a DC government agency identifies a need for a particular good or service, a responsible person within that agency follows a certain contracting procedure to satisfy that need. The District of Columbia has a policy for contracts and procurement that applies not only to contracting of individuals to perform work, but also contracts with vendors to obtain goods. At OCTO, YUSUF ACAR is in a position to oversee both types of contracting. The process is similar for both types of contracts.
21. OCTO employees identify a need for work to be completed or goods to be purchased. The first step is to submit a request to the Office of Contracting and Procurement (OCP). This is a Requisition for a Purchase Order (PO) Number. PO’s are specific to each contract. Once the PO is received granting approval to proceed, vendors may submit proposals to complete the work. A vendor is then selected by the agency and assigned that PO. If the contract is for goods, the vendor will order the specified amount and bill the DC Government using the corresponding PO. If the contract is for services, the vendor will hire individual(s) and bill the DC Government for the hours worked according to the agreed upon contract. To track the contract, these PO’s are entered into the Procurement Automated Support System (PASS). As invoices are submitted by the vendor for payment, the number of hours and the remaining dollar amount of the PO are reduced accordingly.
F. THE CONTRACTING PROCESS IN THIS CONSPIRACY
22. I have learned during the course of this investigation that, in the acquisition of goods, ACAR approves both operational and compliance purchases. ACAR also selects the vendor. ACAR has been known to work with the vendor before the PO is submitted. As further described below, ACAR and the vendor will agree that the PO will be submitted for one quantity of goods, and in actuality a lesser quantity will be ordered and delivered. The vendor is then paid according to the original PO because ACAR approves the final invoice, falsely certifying in violation of his official duty, in exchange for a payment, that OCTO received the agreed upon, greater, quantity of goods.
23. In a similar fashion, ACAR is able to manipulate Purchase Orders for contract employees. A scope of work is created with the estimated number of hours necessary to complete the project. The project is assigned an hourly rate or budget. ACAR is then the individual that approves the timesheets for the contractor. In some instances ACAR will inflate the hours of a real contract employee that actually performs work for OCTO. In other instances, ACAR hires “ghost employees” through a vendor. These “ghost employees” are individuals that do not actually work any hours, but ACAR nonetheless approves a timesheet for the “ghost employee”, falsely certifying in violation of his official duties, and in exchange for a payment, that the hours were worked. The scheme continues until the hours or budgeted amount are depleted for the PO or the end date has been reached, unless there is a renewal.
24. ACAR brought the CW into this conspiracy and, in his role as a seeming co- conspirator, CW also has received payments in these schemes. For purchase orders for goods and for services as described above, ACAR and the CW receive a share of the proceeds as a bribe payment from the vendor for awarding the contract and falsely certifying that the correct quantity of goods were received or the hours were worked. CW’s share is either deposited in an account controlled by the FBI, as set forth below, or, in the case of cash, CW turns the cash over to the FBI.
G. THE CRIMINAL CONSPIRACY
25. In or about March 2008, YUSUF ACAR and the CW met for a drink outside of the office on a Friday and YUSUF ACAR suggested to CW a way they could get some of the money that is paid to vendors. YUSUF ACAR told the CW that if he and the CW awarded contracts to a certain company, they would get money in return. At the time of this meeting, the CW thought that YUSUF ACAR had identified the company as AITI or AITE; he later learned that the company was AITC. CW had a number of subsequent meetings with YUSUF ACAR, some of which were also attended by S.E., who is also an OCTO employee and owner of Allnet Systems, Inc., in which they discussed various ways to defraud the DC Government. Among other things, they discussed receiving kickbacks from vendors for service contracts, a scheme involving ordering goods where the vendor would bill the DC Government for a greater number of units than was actually purchased, and having a company associated with S.E. certified as a Certified Business Enterprise (CBE) so that they could award contracts to S.E.’s company and defraud the government. They also discussed purchasing an existing CBE to further their criminal scheme.
26. Over the next several months, ACAR and the CW had numerous conversations in which they discussed illegal activity and schemes related to their positions in the DC government. For example, in May 2008, ACAR suggested that he, the CW, and an employee could split a $120 per hour contract three ways. They would pay the employee $40 per hour, and split the remaining $80 between themselves. In May 2008, ACAR described to CW a scheme where a vendor would invoice the DC government for a certain number of units, but only order and provide a lesser number. ACAR would split the profit of the scheme with the vendor. In June 2008, ACAR talked about a scheme to issue a purchase order for $300,000 worth of goods. Instead of ordering the goods new, ACAR suggested they purchase similar goods on-line for approximately $100,000. In July 2008, ACAR told the CW that a contractor started working for OCTO through a contract with IITS. ACAR told the CW that they would each receive money as part of this contract. In August 2008, ACAR proposed a scheme in which he and the CW would hire an individual under a contract. The employee would only work 10 hours a week, but would be paid for 40 hours per week. ACAR told the CW that they would split the money from the 30 hours per week that the contractor was paid.
27. In addition to the conversations between ACAR and the CW mentioned above, the two also had numerous meetings with other co-conspirators. Some of these meetings are summarized briefly as follows:
GHOST EMPLOYEE SCHEME #1
28. E.S. was hired as a contractor for OCTO through AITC in approximately January 2007 to fulfill purchase order number 248102. The project name was HIPAA IT Security. E.S. left OCTO in October 2008. However, there was still money and hours left in Purchase Order 248102 when E.S. left. Even though E.S. no longer performed work pursuant to the purchase order, AITC continued to bill the DC Government for hours E.S. supposedly worked, submitting time sheets approved by ACAR for hours E.S. did not actually work. After a number of pay periods ACAR and BANSAL concocted a scheme to use “ghost employees” to replace E.S. Contractors hired under this purchase order would have worked at OCTO, and would have reported to the CW in the performance of their duties. The “ghost employees” were Frank Jackson and Vikrant Kothari. The CW does not know Frank Jackson or Vikrant Kothari. The CW did not see any individuals perform work under this purchase order after E.S. left OCTO. Notwithstanding that the ghost employees did not perform any actual work, AITC continued to bill and was paid by the DC government until the contact was depleted. Knowing that Frank Jackson and Vikrant Kothari were not real contract employees and that they did not perform any work and were not entitled to any compensation, ACAR approved falsified time sheets for Frank Jackson and Vikrant Kothari, in violation of his official duty, under PO 248102. AITC then submitted invoices to the DC Government using these fraudulent time sheets as supporting documentation for hours worked. By submitting false timesheets for two individuals, ACAR and BANSAL were able to deplete the remaining funds in PO 248102 at a faster rate.
29. The CW was brought into this scheme by YUSUF ACAR and received a share of the proceeds. Some of the schemes ACAR planned to undertake involved work and contractors in the CW’s area of responsibility. In order to have a successful ghost employee scheme with workers under CW’s control, the CW would have to be a part of the conspiracy. To allow the CW to receive payment for his role in this and other schemes, ACAR directed CW to establish a business bank account (CW’s account). The FBI created an account at Sun Trust Bank for CW to use for this purpose in the name of JAM Consulting, which is a fictitious company created by the FBI. The FBI controls this bank account. CW provided the account number and wire transfer instructions to ACAR and BANSAL.
30. On November 14, 2008, a deposit of $4,800.00 was made into the CW’s account via electronic/ACH credit. The source of the deposit was listed as "Advanced Integra AA". The full name of the depositor is Advanced Integrated Technologies Corporation. The ending balance of the account was $4,764.64, after $35.36 was taken out of the account to pay for checks. Records from Wachovia Bank for the AITC account show that on November 14, 2008 an Automated Debit transaction in the amount of $4800.00 took place with the notation “MISC SETTLE WC-OFFSET JAM CONSULTING”. As noted above, JAM Consulting is the name of the fictitious company created by the FBI and used by the CW at the FBI’s direction in this case to receive his portion of the bribery payments for his role as a co-conspirator. JAM consulting is not a real company; no work was done by JAM Consulting or by anyone working for JAM Consulting. BANSAL and YUSUF ACAR knew that JAM Consulting was not entitled to this money. This payment was made as part of the bribery conspiracy scheme.
31. On December 3, 2008, a deposit of $8,160.00 was made into the CW’s account via electronic/ACH credit. The source of the deposit was listed as "Advanced Integra AA". The full name of the depositor is Advanced Integrated Technologies Corporation. The ending balance of the account after the deposit was $12,924.64. This payment was also made as part of the bribery conspiracy scheme.
32. On December 10, 2008, YUSUF ACAR had a wide-ranging conversation with the CW over the telephone which was recorded. The subject of “Eric’s deal” [referring to E.S.] was raised by ACAR, and ACAR expressed the view that BANSAL should not get as big of a share of the proceeds of this crime as BANSAL was not taking as much risk as ACAR was. YUSUF ACAR also instructed the CW that CW would need to “defend” the requisition for “Eric’s position” that ACAR had created and given to T.S., which was part of the “ghost employee” scheme. Excerpts of that conversation are set forth below:
33. SUSHIL BANSAL, the President and CEO of AITC, knew that the CW was an employee of OCTO, was not entitled to any payments, and paid him his share of this ghost employee scheme as part of a bribery conspiracy that consisted of ACAR and BANSAL. As noted above, at the October 20, 2008 meeting between SUSHIL BANSAL, YUSUF ACAR and the CW, BANSAL told ACAR and CW to provide account numbers for family members so he can deposit the proceeds of the scheme. BANSAL said he has to show the IRS the flow of money therefore it is important that his business has an expense for the money he receives from the DC Government. BANSAL encouraged ACAR and CW not to leave a paper trail regarding the transfers. BANSAL told ACAR and CW that it is better for a company to receive the transfer if there is one you can trust. He said he does not need to know the details, just that the company has been legitimately established. In addition, as noted above ACAR directed the CW to open a business bank account to receive his share of the proceeds of the bribery scheme. The FBI opened the JAM Consulting account for the CW to use for this purpose. As noted above, CW provided the account number and wire transfer instructions to ACAR and BANSAL. The payments from AITC to JAM consulting were the proceeds of specified unlawful activity, that is, bribery, and were made to the business bank account CW set up at BANSAL’s suggestion and ACAR’s direction in order to conceal the fact that these were bribe payments, and to make them look like payments for work performed. Moreover, Wachovia Bank and Sun Trust Bank are financial institutions whose deposits are insured by the Federal Deposit Insurance Corporation, and they are engaged in, and their activities affect, interstate commerce.
GHOST EMPLOYEE SCHEME #2
34. In October 2008, ACAR approached CW and proposed another scheme involving so-called “ghost employees”. PO 220653-V2 had a project name of Firewall Security Engineer, and was managed by a company I will call “Company 1” for the purpose of this affidavit. ACAR asked CW to provide two people, preferably relatives, who would pose as the two employees in the scheme. ACAR told CW that he had an arrangement with Company 1 to hire the contractors directly, so Company 1 would not need to meet the individuals. Some time later, ACAR advised CW that he would supply one of the individuals himself. Thus, CW only introduced one person, Khalid Rahman, who was actually an FBI Special Agent working as an Undercover Employee. Khalid Rahman corresponded with Company 1 via electronic mail and telephone to secure a position.
35. The salary for each employee was $117 per hour according to the Purchase Order with OCTO. Per the arrangement between Khalid Rahman and Company 1, Company 1 would pay Khalid Rahman $100 per hour. ACAR would approve and submit completed time sheets which were false to Company 1 so Khalid Rahman and the other ghost employee would be paid by Company 1. Company 1 then submitted an invoice to the DC Government based on the fraudulent invoices. ACAR and CW agreed to split the $100 per hour evenly, between themselves. 36. After the contract was approved, Khalid Rahman contacted T.P., a representative from Company 1. Khalid Rahman filled out the necessary paperwork, and was hired by Company 1 per the contract mentioned above. Khalid Rahman supposedly started work for OCTO on November 10, 2008. Khalid Rahman was actually an FBI undercover agent who assumed this identity for the purpose of this investigation. Khalid Rahman did no work at any time for Company 1 or for OCTO, and ACAR knew that Khalid Rahman at no time did any work for Company 1 or for OCTO.
37. Khalid Rahman was fired on December 5, 2008. His employment was terminated because ACAR wanted BANSAL’S company, AITC, to begin managing that PO. The transition from Company 1 to AITC is described more fully below under “Ghost Employee Scheme #3”.
38. The CW filled out timesheets for Khalid Rahman reflecting four weeks of work, even though Rahman did not perform any work. The CW actually signed Khalid Rahman’s name in the signature block on the time sheets. CW then provided the time sheets to ACAR. ACAR signed the time sheets as “OCTO Project Manager”. On or about December 18, 2008, ACAR faxed the time sheets to Company 1, which was located in Virginia, from his office in Washington, D.C. Company 1 generated two invoices related to Rahman, in the amounts of $13,160.00 and $3,760 respectively, and submitted them to the DC government.
39. On or about February 5, 2009, Khalid Rahman received a check from Company 1 in the amount of $14,400.00. The check was deposited into Khalid Rahman’s bank account on February 9, 2009. [The payment to Khalid Rahman was delayed because Company 1 issued a stop payment on the first check issued to Rahman, due to the fact that it was not received for several weeks. The check that was deposited on February 5, 2009 was actually the replacement check issued by Company 1.]
40. On January 22, 2009, ACAR and CW met at a local restaurant. During the meeting, CW gave ACAR $5,000 in cash and a cashier’s check for $2,200, which represented ACAR’s share of the money stolen via the scheme involving Khalid Rahman. This transaction was funded with FBI funds; the money that Khalid Rahman, the UCE, received from Company 1 remains under FBI control. ACAR accepted the $7,200 as his bribe payment for approving the falsified time sheets in violation of his official duty. The remaining portion of the $14,400, which amounted to $7,200, represented the CW’s share of the payment for his role in the scheme.
41. According to bank records obtained from Sun Trust Bank, the $2,200 cashier’s check made out to YUSUF ACAR referenced above was negotiated on January 23, 2009 at a Sun Trust Bank branch.
THE MCAFEE SOFTWARE SCHEME
42. On or about October 31, 2008, AITC submitted a quote to OCTO for the purchase of 2,000 units of Foundstone software. “Sushil Bansal” was listed as the Account Manager for AITC. The quote was delivered to “Mr. Yusuf Acar/Mr. B.M.”. The total amount of the quote was $104,166.00.
43. On or about November 17, 2008, OCTO generated a Statement of Work for 2,000 units of McAfee Foundstone software. The software is designed to provide automated scanning and vulnerability assessment according to the Health Insurance Portability and Accountability Act (HIPAA) compliance rules.
44. On or about November 28, 2008, OCTO generated a purchase order, number 282069, to AITC for 2,000 units of Foundstone software.
45. On or about December 3, 2008, McAfee generated a quote for AITC for the purchase of 500, not 2000, units of Foundstone software. The End User price for this sale was listed as $36,845.00.
46. On or about December 12, 2008, OCTO received the items associated with this purchase order. Documents from McAfee indicate that only 500 licenses for Foundstone software were provided to OCTO as part of this order, not 2,000 units as reflected on the OCTO purchase order, and for which AITC billed the DC government. The Procurement Automated Support System (PASS) indicates that ACAR signed for receipt of the items associated with this purchase order on December 15, 2008.
47. On December 10, 2008, YUSUF ACAR had a wide-ranging conversation with the CW over the telephone which was recorded. The subject of the McAfee deal was raised by ACAR and ACAR complained that BANSAL should not receive one-third of the proceeds of the crime for his role:
48. On January 22, 2009, a deposit of $8,247.00 was made into the CW’s account via electronic/ACH credit. The source of the deposit was listed as "Advanced Integra AA". The full name of the depositor is Advanced Integrated Technologies Corporation. The ending balance of the account was $26,691.64. This payment was made to CW by SUSHIL BANSAL as part of the bribery conspiracy for his participation in the McAfee scheme.
49. On the same date, January 22, 2009, the CW had a conversation with SUSHIL BANSAL about why his share of the McAfee scheme was smaller than CW had expected. In relevant part, the following telephone conversation took place:
50. As SUSHIL BANSAL points out in the above conversation, CW was not part of this scheme at its inception, and BANSAL was “shocked” when “CW got to know about it”.
51. On January 26, 2009, four days after the above conversation, SUSHIL BANSAL paid an unexpected visit to CW at his OCTO office. While he was in the office, SUSHIL BANSAL gave CW an envelope that contained $3,520 in cash. SUSHIL BANSAL explained to CW that he spoke with YUSUF ACAR, and the two decided to increase CW’s share of the money stolen as part of the McAfee software purchase. This payment was made to CW by SUSHIL BANSAL as a bribe for his participation in the McAfee scheme. The CW turned over the $3,520 in cash to FBI agents who secured the cash as evidence.
GHOST EMPLOYEE SCHEME #3
52. Around the time that Khalid Rahman was fired as described above, ACAR and BANSAL discussed the transfer of management of the contract from Company 1 to AITC. ACAR and BANSAL met with the CW in the CW’s office and advised him of their plan. ACAR or BANSAL then contacted T.P. at Company 1 and asked T.P. to transfer management of the contract to AITC. T.P. initially refused this request. T.P. called the CW to discuss AITC’s request. The CW told T.P. that OCTO wanted AITC employees to be hired for the contract. As a result, T.P. agreed to let AITC manage the contract. Per the arrangement between AITC and Company 1, AITC would hire the contractor and pay the individual. AITC would then bill Company 1, sending them time sheet documentation as confirmation of work performed. Company 1 would then bill the DC Government.
53. According to invoices from Company 1, once Khalid Rahman was fired, two individuals continued to be paid under PO 220653-V2. Khalid Mahmood and Aaron Roane were paid by Company 1 for work in December 2008 and January 2009 under this PO. Contractors hired under this purchase order would have worked at OCTO, and the CW would have seen these employees in the performance of their duties. The CW does not know Khalid Mahmood or Aaron Roane. The CW did not see any individuals perform work under this purchase order.
54. On December 10, 2008, YUSUF ACAR had a wide-ranging conversation with the CW over the telephone which was recorded. The subject of SUSHIL BANSAL’s share of the proceeds of the was discussed as follows:
55. On February 10, 2009, CW called SUSHIL BANSAL and the conversation was recorded, which is set forth below in relevant part:
56. In this conversation, SUSHIL BANSAL and CW are discussing a contract for one of their ghost employees. During the first part of the conversation, they appear to discuss how they can renew money for the Purchase Order associated with the contract with Company 1, referred to above as Ghost Employee Scheme #3. When a purchase order is depleted, no more money can be paid out under that purchase order until it is renewed in PASS. To renew a purchase order, an individual with the proper authority must make a presentation to one or more individuals and justify why the increase is needed. For this particular purchase order, the CW tells BANSAL he will try to get the renewal himself.
57. In the latter part of the conversation, they appear to talk about the rate they should charge for the employee. BANSAL expresses a concern that $145 is too much, and seems to want to charge a lower amount in the normal salary range so as to prevent people from asking questions about the contract. This actually refers to a new ghost employee scheme under the HIPAA project. The scheme involved three ghost employees and one legitimate employee. This conversation demonstrates the continuing nature of the criminal conspiracy, and the ability and motivation of the co-conspirators to steal more money from the DC government.
58. Company 1 submitted an invoice and time sheets to OCTO for hours supposedly worked by Mahmood and Roane from December 8 to December 31, 2008. The amount on the invoice was $31,960.00. On January 5, 2009, a deposit of $5,520.00 was made into the JAM account, which the ACAR and BANSAL believe is under the direction of the CW, via electronic/ACH credit. The source of the deposit was listed as "Advanced Integra AA". The full name of the depositor is Advanced Integrated Technologies Corporation. The amount of the deposit was approximately one-third of the amount paid for one of the suspected ghost employees. This payment was made to CW by AITC, a company owned and controlled by SUSHIL BANSAL, as a bribe for his role in the scheme in convincing Company 1 to allow AITC to take over management of the contract.
59. On February 5, 2009, a deposit of $10,800.00 was made into the CW’s account via electronic/ACH credit. The source of the deposit was listed as "Advanced Integra AA". The full name of the depositor is Advanced Integrated Technologies Corporation. The ending balance of the account for the monthly statement was $37,491.64. This payment was made to CW by AITC, a company owned and controlled by SUSHIL BANSAL, as part of the bribery conspiracy.
H. THE HISTORICAL FLOW OF MONEY BETWEEN THE TARGET COMPANIES AND THE CO-CONSPIRATORS
60. A review of AITC bank records showed that funds are distributed by the company via direct deposit and checks to individuals and businesses. AITC issued several checks to G.A., wife of YUSUF ACAR. Between December 2006 and May 2007 G.A. received $70,201.00 in checks from AITC.
61. AITC sent several direct deposits to IITS between August 2007 and April 2008 totaling over $152,700.00. S.M. is a principal of IITS. S.M. has received payments via direct deposits and checks for various amounts from AITC beginning December 2006.
62. AITC sent several direct deposits totaling over $250,000.00 to Circle Networks between May 2007 and October 2008. YUSUF ACAR and S.E., both OCTO employees, are officers of Circle Networks, as is D.L.
63. Circle Networks, Inc. has issued checks to all three officers of the company, D.L., S.E. and YUSUF ACAR in varying amounts and frequency. Checks have also been issued to G.A. and G.R., known to be the same individual, YUSUF ACAR’s wife. Checks vary in amount and frequency between April 2004 and December 2007. Notations on the memo line of the checks have included “contract, work, and distribution.”
64. F.A. and S.A. received bi-weekly payments from AITC via direct deposit into an account in the name of Network Osiris from October 2005 to April 2007. Initially they were sent to F.A. and in August 2006 they began to be sent in S.A.’s name.
65. In 2006, Network Osiris issued fifteen (15) checks to G.A. totaling $43,755.00. The memo line read “IT Consulting Services.” All checks to G.A. were drawn by F.A. Four checks were issued to S.A. from October 2005 to April 2006 totaling $55,000.00. The memo line read “IT Consulting Services.”
66. ALLNET Systems began issuing checks to G.A. in May 2006. The checks vary in amount and frequency. Additionally, on at least one occasion a bank cashier’s check was purchased by ALLNET in the name of G.A. using proceeds from ALLNET’s account. On 10/23/2006 ALLNET issued a check for $15,000 to “Yusuf Acar.” ACAR’s name was crossed out on the payee line and changed to Bank of America. S.E. is an officer of ALLNET. On 11/30/2006 S.E. purchased a $9,000.00 cashier’s check payable to G.A. using funds from his personal account.
I. YUSUF.ACAR’S.INTERCEPTION OF ELECTRONIC COMMUNICATIONS
67. On or about February 10, 2009, ACAR intercepted an email from the DC Office of the Inspector General (OIG).
68. On February 10, 2009, ACAR contacted CW telephonically to discuss the content of the email. During the conversation, ACAR outlined the method he used to intercept the email. A portion of the conversation is as follows:
69. During the conversation ACAR explains to the CW the rules that he and possibly one other individual have set on the network to alert them to specific electronic communications in DC agencies outside of OCTO. ACAR’s final comment, “Are we going to jail?” demonstrates that he is aware that his actions are illegal.
J. SUMMARY OF PROBABLE CAUSE FOR THE ARREST
70. Based on the information outlined herein, your Affiant respectfully submits that there is probable cause to believe that YUSUF ACAR and others devised and executed a bribery scheme and a scheme to defraud in violation of Title 18, United States Code (U.S.C.), Sections 201 and 371 (Conspiracy to Commit Bribery), Sections 1343 and 1346 (Honest Services Wire Fraud), Section 208 (Conflict of Interest), and Section 1956 (Conspiracy to Commit Money Laundering). There is probable cause to believe that ACAR, BANSAL, and others conspired to devise and execute the scheme to bribe and defraud, and to commit money laundering, and committed at least one overt act in furtherance of those conspiracies in violation of Title 18 U.S.C. Section 371 (Conspiracy).
71. By this affidavit and application, I am requesting the Court issue an Arrest Warrant for YUSUF ERKAN ACAR, date of birth: xxxxxxxx 1968; Social Security Account Number xxx-xx-5869.
FURTHER YOUR AFFIANT SAYETH NOT.
Sworn and subscribed to this day of March 2009.
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