'-Case Document 18 Filed 07/16/13 Papa 13 PagelD#'52 - UNITED STATES DISTRICT COURT FOR ., EASTERN DISTRICT or VIRGINIA 5 20,3 Alexandria DiVisi?"' cram - AttitAtinnIs.vIRsInIA UNITED STATES OF AMERICA No. 1:13er305' V. Count 1: 18 1349 . (Conspiracy to Commit Wire Fraud) KEITH JOHNSON and ANGELA JOHNSON, Counts 2-9: 18 U.S.C. 1343 Defendants. (Wire Fraud) Forfeiture Notice Indictment July 2013 Term -- at Alexandria, Virginia The Grand Jury charges that: Introduction At all titnes material to this indictment, unless a specific date is noted: 1. Defendant Keith Johnson, who is married-to defendant Angela Johnson, worked from in or about May 2007 to May 2008 for Company #1 a U.S. Department ?f Defense prime contractor that maintained and operated offices and facilities intemationally, including a facility located in Virginia, vrithin the'Eastern District of Virginia. All emails to and 'front Company #1 email addresses were routed through and stored on Company #1 's servers at its Virginia, fdcility in the Eastern District of Virginia. 2. In or about September 2007, Keith Johnson and Angela Johnson incorporated Company #4 in Tennessee and Company #5 in Florida. Keith Johnson and Angela Johnson formed, operated, and controlled Company but Company #4's corporate documents vrith the State of Florida listed Angela Johnson's mother and Keith Johnson or Angela Case Document 18 Filed 07/16/13 Pag'e'2"'of 13 PagelD# 53 Johnson--a--as its corporate officers. From in or about 2007 to in or about 200?} Company #4 acted as a Company #1 subcontractor that supplied parts to Company #1 on its contracts listed below. 3. In about 2005, the awarded Company #1 Contract a Vehicle Maintenance Apprenticeship Training contract Contract") to provide vehicle- flcet maintenance for the Afghan National Army The VMAT Contract had an initial obligated value of $10 million and a final obligated value in excess of $49 million. On or about December 19, 200?, the awarded Company #1 Contract an Equipment Maintenance Apprenticeship Service contract Contract") to provide ANA vehicle-fleet maintenance following the conclusion of the VMAT Contract. The EMAS Contract had an initial obligated value in excess of $60 million and a final obligated value in excess of $220 million. The VMAT and EMAS Contracts required Company among other things, to perform ANA vehicle maintenance, order parts,'and perform supply-chain management. Company #2 'was a Thailand-based company that specialized in providing and maintaining wholesale automobiles and other motor vehicles. Company #2 served as Company #1 subcontractor on the VMAT and EMAS Contracts and was generally responsible for parts warehousing and vehicle maintenance. Inrthat capacity, Company #2 generally initiated requests for parts and supplies on the VMAT and EMAS Contracts with Company which was generally responsible as the prime: contractor for parts ordering and"contract management. Company #2 also maintained a "Central Maintenance Facility'? in Kabul, Afghanistan, where Company #2 received and stored parts. I Keith Johnson worked for Company #1 in Kabul, Afghanistan, as a "Project Manager", and Company #l's Procurement Manager" for the VMAT and EMAS Case Document 18 Filed 07/16113 Page 3.'of 13 Page|D# 54 . Contracts. As the Coinpany #1 ANA Procurement Manager, Keith Johnson received material requests from Company #2 identifying items needed for purchase in support of ANA vehicle maintenance. After Keith Johnson determined whether the request would 'require an international or local purchase, Company #1 would generate a request for quotation to solicit bids for the desired item from other Company #1 subcontractors. Ea_ch RFQ generally required multiple bids. Upon approval of a particular bid, Company #1 would issue a purchase 'order to the winning subcontractor. Company #1 could also award P05 on 'a "sole- source" basis to single subcontractors without competing bids if Company #1 determined (and documented in a sole-source justification letter) that only one vendor would be able to provide parts or services and that it would be in the best interest of the to purchase from that one particular vendor. Moreover, Company #1 could also award P03 pursuant to Blanket Purchase Agreements through which subcontractors agreedto provide supplies for Company #1 on an as-needed basis at agreed-upon prices. I 6. On or about June 20, 2007, Keith -Johnson signed a Company #1 conflict-of- interest disclosure certificate (labeled with the name of a Company #1 subsidiary). On' that certificate, Keith Johnson checked "no" for each of seven boxes asking about various potential conflicts of interest. These included whether he had any family members employed by Company #1 customers or suppliers; (ii) any of his family members served as paid or unpaid directors, officers, advisers, or consultants to Company #1 customers or suppliers; and of his family members had ownership interest in any such customers or suppliers. Keith Johnson fitrther checked "no" when asked whether he received any commissions, royalties, rents, or consulting fees from any Company #1 customers or suppliers. At the bottom of the disclosure certificate, Keith Johnson signed underneath a certification stating that he had read 4 Case Document 18 Filed 07/16/13 P?ige"tt of 13 PagelD# 55 and understood the conflict-of-interest policy, would comply with" it, and would tnake immediate written disclosure pursuant to -that_po1icy if there were any change in the infonnation he provided on the disclosure certificate. From June 2007 through the time that he ceased employment with Company Keith Johnson did not submit any additional changes or disclosures updating the information he provided on the certificate. 7. .E. worked for Company #2 in Afghanistan as a "Project Manager" from in or about 2005 through in or about 2008. .E.'s responsibilities included managing and overseeing Company #2's subcontracting activities with respect to _the VMAT and Contracts, including vehicle maintenance, parts warehousing, and forwarding of parts requests to Company In or about April 2008, -J.E. returned to the runited worked for Company if m' g. 6" 933 1 remotely until ultimately leaving Company it)' in or about September 2008. 8. .K. worked for Company #2 in, Afghanistan starting in or about March 2007. .K. initially worked as a "Deputy Project Manager'? under .E.'s supervision. In or about April 2008, when .E. began to work for Company #2 from the United States, J.K. assumed J.E.'s in-country I responsibilities for Company After J.E. left Company .K. assumed .l.E's role as Project Manager. J.K.'s responsibilities included overseeing Company #2's subcontracting activities with respect to the VMAT and Contracts, including vehicle maintenance,' parts warehousing, and forwarding of parts requests to Company 9. Company #3 was a Georgia-based corporation that .E. formed and that filed its articles of incorporation in or about July 2007. Company #3's corporate formation documents list only J.E. and his ex-spouse as corporate officers, but J.E. and J.K. orally agreed that they co- owned Company From in or about 2007 to in or about 2009, Company #3 acted as 'a Case Document 18 Filed 07l16/13 Page 5.\of13 Page|D# 56 Company #1 suhctoritractor that supplied parts to Company #1 on the YMAT and EMAS Contracts. 10. Company #6 was a shipping company looated in 'Sterling, Virginia, within the Eastern District of Virginia. Company #6 served as an intermediary shipping company between Company #1 and subcontractors, including Companies #3 and Upon receipt of parts from Companies #3 and Company #6 shipped those parts to Company #1 in Afghanistan. All emails to and from Company #6 email addresses were routed through and stored on Company #6's servers in Sterling, Virginia. Case Document 18 Filed 07/16/13 Page Bgof 13 PagelD# 57 - Count 1 I ix - (Conspiracy to Commit Wire Fraud) 1 1. The allegations in paragraphs 1-1 1 of this Indictment are realleged. 12. From in or about July 2007 through in or about June 2010, in the Eastern District of Virginia and elsewhere, the defendants, Keith Johnson and Angela Johnson, knowingly and intentionally combined, conspired, confederated, and agreed with J.E., others known and unknown to commit wire fraud, that is: having devised and intending to devise a scheme and artifice to defraud Company #1 and the and to obtain from Company, #1 and the money and property by means of materially false and fraudulent pretenses, representations, and promises, to transmit and cause to be transmitted by means of wire communication in interstate and foreign commerce writings, signs, and signals for the purpose of executing the scheme and artifice, in violation of Title 18, United States Code, Section 1343. Purpose of the .Conspiracy 13. The purpose of the conspiracy was for the Keith Johnson, Angela Johnson, J.K., and others to obtain subcontracts, POs, and BPAS from Company #1 to supply parts to Company #1 as part of the VMAT and EMAS Contracts, all by using Keith Johnsori's position in and influence over Company as well as J.E.'s and J.K.'s positions in Company to 'funnel payments on Company #1 subcontracts, P03, and BPAS through Company #3 and Company #4 to the conspirators. Manner and Means of the Conspiracy 14. The manner and means by which Keith Johnson, Angela Johnson, and others would and did carry out the conspiracy included, but were not limited to, the following: Case Document 18 Filed 07/16/13 Page '7\\0f 13 Page|D# 58 . 'lusing Keith Johnsorfs position in Company as J.E.'s and J.K.'s positions within Company to funnel Company ii] subcontracts, POs, and BPAs to Company #3 and Company using aliases (including Angela Johnson's maiden name, "Gregory," for Angela' Johnson and "David Pauls" for .E.) to conceal from Company - and Company #2 Keith Johnsorfs, Angela Johnson's, and J.E.'s involvement with, financial interest in, 'and control of Company #3 and Company otherwise concealing from Company #1 and Company #2 the material fact of the involvement with, financial interest in, and control of Company #3 and Company #4 by Keith Johnson, Angela Johnson, .E., and coordinating bids for PCs between Company #3 and Company #4 by inflating one company's bid to ensure the other company would win the P0 without truly competitive pricing; recommending and approving P03 for excess parts that were not yet needed on Company #1's contracts, thus causing increased profit on those POs to Keith Johnson and Angela Johnson, through Company and .E. and .K., through Company Company #4 ncit supplying all parts in compliance with Company #1 PO requirements, and in some cases supplying no parts, despite receiving an approximately 50% advance payment on Company #1 P03 and not refunding those payments for P03 not completed; Case Document 18 Filed 07/16/13 Page -8.01' 13 Page|D# 59 I "3 using Company #6 to receive parts in the Eastern Districtof Virginia and then ship them overseas to Company #1 and Company sending emails to Company #6 in the Eastern District of Virginia, including emails from Angela Johnson using her maiden name and from .13. using the alias "David Pauls," to further the conspiracy and conceal the involvement of Keith Johnson, Angela Johnson, J..E., and initially' paying kickbacks from Company #3 to Keith Johnson and Angela Johnson in exchange for Keith Johnson's assistance in steering Company #1 subcontracts, P03, and BPAS on Company #1's DOD contracts to Company routing Company #3's kickbacks to Keith Johnson and Angela Johnson through Company #5 forthe purpose of concealing that Company #3 was, in reality, paying kickbacks to Keith Johnson and Angela Johnson in exchange for Keith Johnson's favorable treatment of Company agreeing that once Company #3 and Company #4 were both receiving P0s from Company #1 as a result of the fraudulent activities above, the Keith Johnson and Angela' Johnson would generally receive their share of the conspiracy's proceeds through Company while J.E. and J.K. would receive their share of the oonspiracy's proceeds through Company #3;.and Company #4 paying .K. through an account controlled by .K.'s wife in return for J.K. not reporting Keith Johnson's and Angela Johnson's affiliation with Company #4 to Company #1 or Company (All in violation of Title 18, United States Code, Section 1349.) Case Document 18 Filed 07l16I13 Page Eiof 13 PagelD# 60 16. Counts 2-9 i 15. The allegations in paragraphs 1-11 and 14-15 of this Indictment are realleged. On or about the dates referenced below, within the Eastern Districtof Virginia and elsewhere, defendants Keith Johnson and Angela Johnson, having devised, and intending to devise, a scheme and artifice to defraud Company #1 and the and to obtain from Company #1 and the money and property, by means of materially false and fraudulent .pretenses and representations, knowingly transmitted and caused to be transmitted by means of wire communication in interstate and foreign commerce writings, signs, and signals for the purpose of executing the scheme and artifice to defraud from locations outside Virginia into and through the specified locations within the Eastern District of Virginia: Count;-' 'Date_ I to/thrditsh . 2 i?rtsiori Sterling, 'Virginia email from Keith Johnson, using his Company email, to "Mr. Paulus [sic] who Keith Johnson knew was J.E., copying a Company #6 official and stating that Keith Johnson would "hold final payment until I hear from you" regarding PO #07-063 2/26/08 Rosalyn, Virginia email from Angola Johnson, using maiden name, responding to Company #1 official's email (copying Keith Johnson) with question about a Company #4 bid - M21108 Virginia email from Angela Johnson, using maiden name and copying Keith Johnsotfs Company #1 email, to Company #1 with question about requirements for Company #1 RFQ that led to PO #08-084 4/22/08 Virginia' - email from Keith Johnson, using his Company #1 email, responding to Angela Johnson's email, sent using her maiden name, with details in response to Angela ohnson's question about RFQ that led to PO #03-084 9224/on Sterling, Virginia email from Angola Johnson, using maiden name, to Company #6 with packing slip for parts on PO #08-023 Case Document 18 Filed 07/16/13 Page IQ of 13 PagelD# 61 7 9/24/08_ Sierling,Vi1'ginia email from 'Ange-la maiden name, to Company #6 regardingehipment for P0 #08-066 8 9!29!08 Sterling, Virginia email from Angela Johnson, using maiden name, to Company #6 with packing slip for parts on PO #08436? 9 Sterling, Virginia email from Angela Johnson, using maiden name, to Company #6 with packing slips for parts on P0 #3 08-06'? and 08--064 (A11 in violation of Title 18, United States Code, Section 1343.) 10 Case Document 18 Filed 07I16113 Page of 13 Page1D# 62 Forfeiture Notice 2 Hi' Pursuant to Federal Rule of Criminal Procedure defendants Keith Johnson and Angela Johnson are hereby notified that, if convicted of the conspiracy and wire fraud offenses alleged in Counts One through Nine above, they shall forfeit to the United States, pursuant to. Title 18, United States Code, Section and Title 28, United States Code, Section 246i(c), the following property: A sum of money equal to at least $6,933,179.31 in U.S. currency, representing the amount of proceeds obtained as a result of the violation of Title 18, United States Code, Section 1349, as described in Count One, and the violations of Title 18, United States Code, Section 1343, as described in Counts Two through Nine; I real property located at 9835 Woodland Edge Cove, Cordova, TN 38019; a2008 BMW 7501, VIN a 2008 Mercedes E63 AMG sedan, VIN a Cherokee Industries Vehicle Trailer, VIN approximately $120,599.86 in jewelry purchased from Maharaja of India and Maharaja Fine Jewelry and Gifts in approximately 8 transactions between in or about August 2008 and in or about April 2009; (8) approximately 871,250.00 in jewelry purchased from Venetzia Fine Jewelry in approximately 8 transactions between in or about February 2010 and in or-about August 2010; Pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title 28, United States Code, Section 2461(0), defendants Keith 11 Case Document 18 Filed 07/16/13 Page 12 of 13 Page|D# 63 Johnson and Angela Johnson shalliforfeit up to the value of the amount described in subparagraph by any act or omission of defendants Keith Johnson and Angela Johnson,vthe property described in paragraph or any portion thereof,' cannot be located upon the exercise of due diligence; has been transferred, sold to, or deposited with a third party; has been placed beyond the jurisdiction of the Court; has been substantially diminished in value; or has been cotnrningled with other property which cannot be divided without difiieulty. These assets include, but are not limited to, the follovring: (1) a 2003 Jeep Wrangler, Vehicle Identification Number - (2) account #2135167 in the names of Angela Gregory Johnson and Keith A. Johnson at First Citizens National Bank; - (3) account #2134764 i_n the names of'Angela Gregory Johnson and Keith A. Johnson at First Citizens National Bank; account #250l527206 in the names of Angela 'Johnson and Keith Johnson at Coastal Communityfiank; account #2d00314607 in the names of Angela Johnson, Christina I-Iaznmeir, and Shubee LLC at Coastal Community Bank; and . (6) account 195509062106 in the name of CNH Development at Regions Bank. (In accordance with Title 18, United States Code, Section Title 28, United States Code, Section 2461(c); and Rule Federal Rules of Criminal Procedure.) 4 l2 L,/flaniel P. Butler Case Document 18 Filed Page of 13 PagelD# 64 A True Bill Pursuant to the tire vrimnai of this page has been filgd under seat in the Cle:i:'s Offiee. . Date Foreperson Neil H. MacBride United States Attorney R33 S. Faulcotfifi' A istant United States Attomey Jeffrey H. Knox Chief, Fraud Section Criminal Division, US. Department of Justice By: -- Trial Attorney, Fraud Section - Special Assistant United States Attorney (E.D. Va.)