The Office of Government Ethics (OGE) issued its annual survey in July 2018 of prosecutions involving the conflict of interest criminal statutes. Here is a summary of one of the cases summarized by OGE.
John and Danielle Kays were civilian employees of the Army for Communications-Electronic Command at Aberdeen Proving Ground in Maryland. They were in leadership positions for a 10-year, $19.2 billion dollar contract providing technology services for the U.S. Army.
In 2008, the Kays saw Matthew Barrow, a former college classmate, at a wedding. At the event, Mr. Kays and Mr. Barrow came up with an idea to increase their personal wealth. John Kays, Danielle Kays and Barrow graduated from the U.S. Military Academy at West Point together according to the U.S. Attorneys Office for the District of Maryland.
Under their arrangement, Mr. Kays would steer Army business to a company to be formed by Mr. Barrow (called MJ-6). For his part, Mr. Barrow would steer business of a glass company where he was employed a company to be formed by Mr. Kays (Transportation Logistics Services (TLS) ).
From August 2008 to June 2014, Mr. and/or Mrs. Kays used their positions as federal employees to add MJ-6 as a subcontractor for the Army. They also recommended potential employees for government contractors to work for MJ-6 and approvedMJ-6 employees to work on task orders.
In 2009 and 2010, Mr. Kays received approximately $268,000 in profits from TLS.
Late in 2010, Mr. Barrow’s employer fired him after discovering he had not followed the company’s procedures and was approving payments to TLS without a contract. The Kays continued to direct Army business to MJ-6. Barrows made cash payments to Mr. Kays. These payments were a share of profit the Kays generated for the company through government contracts.
In 2011, the Kays received approximately $333,100 in cash. From January to October 2012, Mr. Barrow paid over $168,000 to Mr. Kays. Barrow paid the Kays their “corrupt money” from MJ-6 disguised as employment salary according to the Department of Justice.
Presumably to hide their actions, John and Danielle Kays made false statements on federal government ethics forms (OGE 450) they were required to file. They did not disclose the cash payments received from Barrow, according to the statement of facts.
The Kays used the cash for their personal benefit, including payments for home renovations, two new vehicles, a powerboat, jewelry, a pool party at their country club and credit card bills, according to prosecutors.
John Kays pleaded guilty to one count of bribery on September 8, 2017, according to court records.
Barrow pleaded guilty to paying bribes of about $800,000, including $500,000 in cash, to John Kays and Danielle Kays.
Prison, Repayment and Forfeiture
Mrs. Kays was sentenced to 18 months in prison, one year of supervised release, and a $100 assessment for conspiracy to defraud the United States and bribery. She also entered into a Consent Order of Forfeiture in which she agreed to forfeit $250,700.
Mr. Kays was sentenced on May 11, 2018 to six years in prison and three years of supervised release. He was ordered to repay $886,519.52. He also entered into a Consent Order of Forfeiture under which he agreed to forfeit $631,705.
On May 10, 2017, Matthew Barrow pleaded guilty to bribery charges related to contracting at Aberdeen Proving Ground (APG), in Harford County, Maryland. Mr. Barrow has not yet been sentenced.