US

Contractor accused of scamming US Navy out of $50M in port overcharged fees

The federal government is seeking to extradite a defense contractor to the US over allegations that he scammed the Navy out of roughly $50million by overcharging port fees.

US authorities are seeking to have Frank Rafaraci, 68, chief executive of Multinational Logistics Services, or MLS, brought to the US from Malta, where he was arrested last week, and charged with overcharging for various services and bribing Navy officials for insider information, according to an arrest warrant viewed by the Washington Post

Among the instances of alleged overcharging include one in January 2015 in which MLS billed the Navy roughly $231,000 for ‘port authority fees’ to allow the aircraft carrier USS Carl Vinson to dock at Manama, the capital of Bahrain, despite its port authority only charging $12,686 for the vessel, according to the affidavit. 

Among the alleged instances of bribery, in August of that year Rafaraci met with an unnamed Navy official, and handed him a envelope of $20,000 in cash and told him to ‘keep up the good work,’ according to his arrest warrant, the Post reported.

Navy defense contractor Frank Rafaraci is accused scamming the branch out of $50million. Among the schemes involved one in which he charged $231,000 for or ‘port authority fees’ to allow the aircraft carrier USS Carl Vinson (pictured) to dock at Manama, the capital of Bahrain, in 2015

He would meet with the officer again three years later to allegedly hand over a $13,500 bribe at a hotel in Miami. The bribes were allegedly for insider information on future Navy contracts, according to the Times of Malta. 

The officer, who served as a Navy liaison to Bahrain before working for the Army, would plead guilty to bribery in June, and has been working with investigators, according to court documents viewed by the Post. His identity and case file has been concealed, the outlet reported.

In addition to bribery, Rafaraci is accused of money laundering to avoid US taxes by moving cash from corporate accounts in Malta and the UK to a shell company in the United Arab Emirates. He had nicknamed the scheme ‘Keep Going,’ according to the Post. 

MLS has been awarded roughly $1.3billion in contracts with the Navy and other federal agencies since 2010 to service ships at ports in the Middle East, Asia and other foreign companies. 

The Navy relies on contractors such as MLS to provide supplies such as food, water, fuel and facilitate various port services to American military ships while in foreign ports.  

US Naval vessels docked at Manama. Its port authority had only charged charging $12,686 to allow the USS Carl Vinson to dock

US Naval vessels docked at Manama. Its port authority had only charged charging $12,686 to allow the USS Carl Vinson to dock 

Rafaraci, who holds dual Italian-American citizenship and primarily lives in Dubai, has been under investigation for several years, according to the Washington Post, but the UAE does not have an extradition treaty with the US.

Federal officials had learned that he planned to visit MLS’ headquarters in Malta, and tracked him there, but a Maltese judge ruled that American and Maltese authorities had not followed proper procedure when they arrested him last Sunday, and he was freed after charging. 

The attorney general refiled a petition to have Rafaraci extradited on Friday, and the judge overseeing the case has now recused himself, the Times of Malta reported.

MLS and Rafaraci will be able to fulfill its current contracts with the Navy, but is barred from doing future business with the branch, a Navy spokesperson told the Post. It is currently the largest provider of port services to the Navy in the world, the Post reported. 

He is mentioned once on MLS’ website in its Code of Ethics section, in which he writes to employees that, ‘Our continued success and ability to achieve our financial goals – as a company and as individuals – depend on conducting our business responsibly, while adhering to the highest standards of ethical business conduct.’ 

Rafaraci's case has been compared to that of Leonard Glenn Francis, or 'Fat Leonard,' (right) a Malaysian contractor accused of bribing Navy officials to allow his contracting firm to overcharge for services. He is pictured with Admiral Mike Mullen

Rafaraci’s case has been compared to that of Leonard Glenn Francis, or ‘Fat Leonard,’ (right) a Malaysian contractor accused of bribing Navy officials to allow his contracting firm to overcharge for services. He is pictured with Admiral Mike Mullen 

Rafaraci’s case has been compared to a previous Navy bribery scandal involving a Malaysian contractor named Leonard Glenn Francis, or ‘Fat Leonard,’ which has been ongoing since 2013, and in which he bribed Naval officials with money, fancy gifts,  prostitutes and other favors to allow him to overcharge for various services. 

Francis, 57, pleaded guilty in 2015, and is currently on a medical furlough in a San Diego rented apartment in California under tight security and surveillance by US authorities, after having served five years imprisonment.

The scandal ensnared hundreds of Naval officials, and 27 have so far pleaded guilty for corruption charges, the Post reported.

After, the Navy had vowed to clean up its operation, and MLS was brought on to cover contracts previously awarded to Francis’ Singapore-based Glenn Defense Marine Asia.    


Source link

Related Articles

Back to top button