CEO of a major defense contractor accused of corruption | Takeover bid
The President and CEO (CEO) of Multinational Logistics Services (MLS), a large ship maintenance company that has received more than $ 1 billion in US Navy contracts since 2010, has appeared in the United States today to face a criminal charge for his alleged involvement in a corruption scheme.
According to the affidavit in support of a criminal complaint filed in September, Frank S. Rafaraci, 68, a US citizen residing abroad, has been the CEO of MLS since at least 2005. MLS is a defense contractor who provides ship maintenance services, such as refueling and storage of provisions, to U.S. Navy ships in ports around the world. From around 2010 to the present, the US Navy, other components of the US Department of Defense (DoD), and US government civilian agencies have awarded MLS maintenance service contracts worth approximately $ 1.3 billion. The affidavit further alleges that, from 2011, Rafaraci was involved in a massive scheme to bribe US Navy officials, defraud the US Navy using falsely inflated invoices and launder the proceeds of the scheme by through shell companies Rafaraci had created in the United Arab Emirates, all in an effort to benefit MLS. Rafaraci made his first appearance earlier today before US trial judge G. Michael Harvey of the US District Court for the District of Columbia.
“Frank Rafaraci is said to have defrauded the Navy, bribed a Navy official and laundered money through foreign bank accounts for years,” said Deputy Attorney General Kenneth A. Polite Jr. of the Criminal Division of the Department of Justice. Justice. “The Criminal Division remains committed to the fight against fraud and corruption in defense contracts around the world. “
“This defendant is allegedly involved in a vast scheme to defraud the United States Navy and bribe public officials for his own gain,” said acting United States Attorney Channing D. Phillips of the District of Columbia. “The US Attorney’s Office will continue to prosecute and hold accountable those who seek to take advantage of our military through corruption and fraud. “
“The criminal case against Rafaraci is the result of careful investigative efforts by the Office of the Inspector General of the Ministry of Defense, agents of the Defense Criminal Investigation Service (DCIS) and our partner agencies “said Special Agent in Charge Stanley A. Newell of DCIS. Field Office for Transnational Operations. “Let today’s action serve as a sobering reminder to those seeking to enrich themselves at the expense of the US military and US taxpayers. DCIS is strongly committed to ensuring the integrity of DoD’s global procurement operations.
“Rafaraci’s alleged long-standing criminal scheme to defraud the federal government with bribery, forged invoices and money laundering has deceived the American taxpayer and wasted extremely valuable resources,” Special Agent in Charge Eric said. Maddox of the Naval Criminal Investigative Service (NCIS) Economic Crimes Field Bureau. “NCIS and our law enforcement partners remain steadfast in their commitment to eliminating bribes and corruption that threaten to diminish the operational readiness and superiority of Navy and Marine Corps fighters. “
“Rafaraci allegedly defrauded the military and laundered the proceeds of his crimes,” said Special Agent in Charge Ryan L. Korner of the Los Angeles field office of the IRS Criminal Investigation (IRS-CI). “IRS-CI Special Agents have once again shown their unwavering commitment to ensuring that those who cheat in the system are brought to justice. IRS-CI is committed to protecting revenues and ensuring that the public procurement process remains fair for all. “
Rafaraci was indicted by a grand jury in the District of Columbia on September 30 and charged with one count of corruption. If found guilty of this charge, Rafaraci faces a maximum sentence of 15 years in prison. A federal district court judge will determine any sentence after taking into account US sentencing guidelines and other statutory factors.
Rafaraci was provisionally arrested in Malta on September 27, 2021, at the request of the United States. The proceedings in Malta ended when he returned voluntarily to the United States on October 18.
DCIS, NCIS, IRS-CI and the Army’s Criminal Investigation Division are investigating the case. Valuable assistance was provided by the FBI, the US State Department’s Diplomatic Security Service, the Maltese Police, the Malta Attorney General’s Office, Essex Police and the UK International Crime Cooperation Center.
Senior Deputy Chief Justin Weitz, Criminal Division Fraud Section Attorney Michael P. McCarthy, and Deputy U.S. Attorney Amanda R. Vaughn are continuing the case. Former Deputy Chief Brian R. Young of the Fraud Section participated in the investigation. The Office of International Affairs of the Ministry of Justice provided considerable assistance.
An indictment and a criminal complaint are only allegations, and the accused is presumed innocent until proven guilty beyond a reasonable doubt in court.