Two Former DLA Employees Plead Guilty to Receiving Bribes

Two former employees at a Marine Corps base in Georgia have pleaded guilty to receiving bribes resulting in the loss of millions of dollars to the United States government.

According to the Department of Justice, two former employees at the Marine Corps Logistics Base in Albany, Georgia  have pleaded guilty to receiving bribes. The case related to a scheme to funnel freight hauling business to a local transportation company. The actions by the former employees resulted in a cost to the federal government of millions of dollars according to Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.

Mitchell D. Potts, 48, and Jeffrey S. Philpot, 35, both of Sylvester, Georgia, each pleaded guilty to one count of bribery of a public official.

During their guilty pleas, Potts, the former Traffic Office Supervisor for the Defense Logistics Agency (DLA) in Albany, Georgia, and Philpot, the former Lead Transportation Assistant in the Traffic Office, admitted to participating in a scheme where they assisted Person A, the owner of several local commercial trucking companies, in obtaining trucking business from the DLA in exchange for the payment of cash and other things of value.

Both defendants admitted that they took steps to push business to Person A and his companies, including:

1) delaying shipments for a period of hours or days, thereby reducing the time available to fulfill the shipping request and assuring that it would be awarded to a local trucking company, usually one owned by Person A;

2) “short loading” shipments awarded to Person A’s companies so that it would appear to require more trucks than necessary to move the subject freight, resulting in additional loads being awarded to Person A’s companies;

3) indicating that removable gooseneck (RGN) trailers were required for shipments, which resulted in many loads being directed to Person A’s companies because they always had RGNs available; and

4) creating “ghost shipments” where Person A billed the DLA for shipments that were never made. Both Potts and Philpot admitted that their actions led to millions of dollars of overcharges to the government.

Potts and Philpot admitted they received cash payments from Person A when he visited the traffic office, sometimes multiple times per week. They also admitted receiving lunches from the person several times a week during the relevant period as well as gift cards and other things of value. Potts admitted receiving approximately $209,000 in kickbacks from Person A during the roughly three-year scheme. Philpot admitted receiving approximately $523,000 in cash and other things of value from Person A during the same period.

At sentencing, each man is facing a maximum penalty of 15 years in prison and a fine of not more than twice the pecuniary loss to the government. As part of their plea agreements with the United States, both Potts and Philpot have agreed to forfeit the bribe proceeds they received from the scheme, as well as to pay full restitution to the Department of Defense. Sentencing is scheduled for Aug. 15, 2013.