Local man pleads guilty to rigging defense bids

NORFOLK

The Defense and Justice departments are investigating a bid-rigging conspiracy involving the sales of elevator parts for aircraft carriers and support vessels.

The investigation has already led to one arrest and guilty plea. Todd M. Mosiman, 38, of Virginia Beach admitted in court Thursday to defrauding the federal government.

Mosiman's attorney said his client is a small player in a larger conspiracy.

"He is the first to fall, so to speak," said the lawyer, Jon M. Babineau Sr. "We expect there will be others charged."

Mosiman admitted in court that he and an unidentified co-conspirator were able to steer more than $167,000 in contracts for fabricated metals to Mosiman's Chesapeake company between 2004 and 2005.

The co-conspirator, an employee of the prime contractor for the elevator work, has since died, but others within the Navy and contractors linked to the bids are being targeted, according to Babineau and the Justice Department.

The co-conspirator was responsible for deciding what parts were needed and then recommending to the Navy the lowest bidder for vendors.

Mosiman admitted that he set up a company in Chesapeake that acted as the vendor for the prime contractor, which was also not identified. Together they concealed their scheme to rig the bidding that enabled Mosiman to win parts contracts for the elevator work.

Mosiman was awarded six contracts worth $167,000 to supply hundreds of elevator parts such as spring rollers, bushings and tracking. Mosiman admitted that he never supplied any parts but was paid anyway.

The co-conspirator and Mosiman opened a joint bank account and split some of the proceeds.

Babineau said Mosiman did actually produce parts under other contracts.

"He made the parts and made them to military specs. There was never anything wrong with the products," Babineau said.

Mosiman faces a maximum of five years in prison, but federal guidelines in his case recommend one to two years. He also faces a fine of up to $250,000, but he has already agreed to repay the government $96,000. He's scheduled to be sentenced on Sept. 21.

Mosiman has also agreed to assist the government in its investigation.

Although the charges were filed in April, Thursday was Mosiman's first court appearance. U.S. District Judge Raymond A. Jackson allowed Mosiman to remain free on a $15,000 personal recognizance bond pending sentencing.

Jackson asked Mosiman whether everything that the government alleged in its court papers was true.

"Yes it is," he answered.

The case was initiated as part of the Justice Department's two-year-old National Procurement Fraud Task Force, which was designed to root out fraud in national security contracting programs.

"Taxpayers ultimately pay the price for those who circumvent the Navy's competitive procurement process for personal gain," Assistant Attorney General Christine A. Varney said in a statement. "These fraudulent schemes are particularly egregious during wartime."

Anyone with information about fraudulent Navy contracting among fabricated metal products dealers is asked to contact the Justice Department's Antitrust Division in Philadelphia at (215) 597-7405 or the Defense Criminal Investigative Service in Norfolk at (757) 441-6067.

Tim McGlone, (757) 446-2343, tim.mcglone@pilotonline.com