Alleged Scammers Indicted in $15.7M Telecom Fraud

According to an indictment unsealed last Thursday in Virginia federal court, four men have been charged with operating a kickback and bribery scheme that involved the Department of Defense’s Office of Inspector General and $15.7M in fraudulent payments, reports Law360.

William S. Wilson of Florida, 52, Timothy R. Donelson of Georgia, 56, Ronald A. Capallia of Alabama, 37 and 42-year-old employee of the Office of the Inspector General, Matthew Kekoa LumHo of Fairfax Station, were named as defendants in the indictment. Donelson and Capallia were employed at a telecommunications company that was awarded a contract entitled the Washington Interagency Telecommunications System, to provide data and voice services to the Department of Defense’s Office of Inspector General, reports Morningside Maryland.  

Donelson awarded subcontracts to Wilson’s companies to provide information technology-related support, even though that was not their area of expertise. Wilson’s two companies were unnamed in the indictment but provided construction services related to the installation of fiber optic cables and cell phone towers, prior to the scheme. Donelson and Capallia were paid hundreds of thousands of dollars via false business invoice and payroll payments, vehicle payments, vacations and babysitting services for providing Wilson with special treatment in connection to the government contract, according to Law360.

Wilson also allegedly paid tens of thousands of dollars in bribes to LumHo, to issue fraudulent service orders filled by one of Wilson’s companies at inflated prices. The government was billed for supplies ordered from Wilson’s company. Allegedly, Wilson arranged for one of his firms to make payroll payments to LumHo’s father-in-law, who was never an employee.

In total, the ploy generated more than $15.7 million in revenue for Wilson’s companies and co-conspirators. All four men have been charged with wire fraud, and conspiracy to commit wire fraud, which hold a maximum sentence of 20 years in prison. Prosecutors said Wilson, Capallia and LumHo have been charged with False Claims Act violations; a maximum penalty of five years in prison. Wilson is charged with bribery and LumHo with accepting bribes, charges that both carry maximum penalties of 15 years in prison, reported Law360.

October 13, 2017