Navy officer pleads guilty to role in $2.7 million procurement scam

AUGUST 8, 2018 — The U.S. Attorney’s Office, Eastern District of Virginia, reports that naval officer Randolph M. Prince, 45, pleaded guilty Monday to a role in a $2.7 million procurement fraud scheme, and to lying on his federal income tax return. Senior U.S. District Judge Robert G. Doumar accepted the plea.

According to court documents, Prince, 45, defrauded the Navy out of over $2.7 million through a procurement fraud scheme in which he, as a member of his Navy unit’s supply staff, steered government contracts to sham companies who were created and run by his friends.

Prince had the authority to make purchase requests for military equipment on behalf of his command, and also had the ability to sign for goods when a company delivered them to his unit on the back end.

Prince took advantage of his position to direct purchases to the sham companies, which had been opened for the sole purpose of receiving government contracts from Prince. When a contract landed on the desk of one of these companies, Prince, and others, would generate fraudulent documentation to suggest the company had honored its end of the bargain. With this documentation in hand, the Navy would then pay the company. However, the sham companies never provided the Navy with anything at all. Instead, they distributed the Navy money amongst Prince and his associates.

Prince pleaded guilty to wire fraud and making a false statement in connection with his 2014 tax return. He faces a maximum of 20 years in prison when sentenced on December 3. Actual sentences for federal crimes are typically less than the maximum penalties.