On October 9, 2012, the US Attorney’s Office for the Southern District of California announced that four U.S. Navy officials and three defense contractors were sentenced for their roles in a large fraud and corruption scheme at the Naval Air Station on North Island in Coronado, California.  

 

The defense contractors provided the U.S. Navy officials with more than $1 million in benefits that included cash, checks, flat screen televisions, home appliances, model airplanes, expensive bicycles, retail gift cards, and remodeling services to their homes.  The U.S. Navy officials then placed millions in fraudulent orders for services from the defense contractors.  

 

The U.S. Navy officials are Donald Vangundy, Kiet Luc, David Lindsay, and Brian Delaney—who all worked for the Navy’s “E2/C2” aircraft program.  Vangundy received 41 months in custody; Luc received 30 months in custody; Delaney received 30 consecutive weekends in custody and five years probation; and Lindsay received 30 consecutive weekends in custody and five years probation.  

 

The three other defendants were owners or employees for defense contractors that provided goods or services to the NAS-North Island.  John Newman was an employee for L&N Industrial Tool & Supply in Poway, California.  Michael Graven was the owner of X&D Supply Inc. in Carlsbad, California.  Paul Grubiss was an employee for Centerline Industrial Inc. in Poway, California.  All of the defense contractors were sentenced to 18 months in custody.  

 

Susan Simon, the Special Agent in Charge of the Naval Criminal Investigative Service’s Southwest Field Office, stated: “Case like this send a clear message to anyone—government officials or contractors—who try to defraud the Department of the Navy: you will get caught.  The sentences received by these seven individuals are the result of the effective and collaborative teamwork between NCIS, its law enforcement partners and the U.S. Attorney’s Office.” 

 

Source: Federal Bureau of Investigation