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Va. man pleads not guilty in Navy kickbacks case

Tuesday - 5/8/2012, 5:36pm  ET

Associated Press

PROVIDENCE, R.I. - A former civilian naval engineer from Virginia pleaded not guilty in Rhode Island on Tuesday to charges stemming from what prosecutors say was a bribery and fraud scheme that cost the U.S. Navy about $10 million over 15 years.

Ralph M. Mariano, 54, of South Arlington, Va., and his 80-year-old father, Ralph Mariano Jr., of North Providence, were indicted after three others accused in the plot pleaded guilty to charges and agreed to cooperate with federal authorities.

Prosecutors allege Ralph M. Mariano, a former naval civilian engineer, used his authority at the Naval Undersea Warfare Center in Newport and his oversight of certain Navy contracts to arrange for naval funds to be funneled back to him directly or through other companies from 1996 until January 2011.

His father is accused of tax evasion. The elder Mariano appeared in court but wasn't arraigned because he didn't have an attorney. His arraignment will be rescheduled.

Magistrate Judge Lincoln D. Almond also denied a request made by the younger Mariano to have former Rhode Island U.S. Attorney Robert Clark Corrente named his court-appointed attorney.

Corrente has been representing Mariano since he was first charged 15 months ago. He argued he should continue to represent Mariano, citing his client's inability to pay legal bills, the complexity of the case and the amount of work already put into mounting a defense.

Assistant U.S. Attorney Lee H. Vilker questioned Mariano's claim that he can't pay for his defense, saying he amassed millions fraudulently and that his sister, father and girlfriend were providing funds to pay legal bills.

Mariano is accused of sharing money from the kickback scheme with his family and associates. Corrente denied prosecutors' claim that an associate of Mariano's identified in the indictment as M.O. had provided nearly $100,000 to pay legal bills.

Almond said Mariano can request to have a lawyer appointed for him from the federal public defender's office or from a panel of private attorneys who provide legal services to indigent clients. Corrente isn't a member of that panel.

The case dates back to February 2011, when Ralph Mariano and Anjan Dutta-Gupta, 58, of Roswell, Ga., who owned Advanced Solutions for Tomorrow, were arrested. The now-defunct company, which had offices in Roswell and Middletown, R.I., had $120 million in Navy contracts when Dutta-Gupta was arrested. The firm laid off all its employees shortly after Dutta-Gupta's arrest.

The indictment alleges Ralph Mariano used his naval position to assist ASFT by seeking more funding for its naval contracts, directing more work to the firm and assisting it to secure certain contracts. He is also accused of threatening to damage ASFT's business relationship with the Navy if the firm didn't follow his instructions for making payments to companies established by a co-defendant, Russell E. Spencer, 57, of Portsmouth, R.I., the indictment said.

Ralph Mariano faces 33 counts on charges of conspiracy, bribery, theft of government funds, extortion, wire fraud and tax evasion.

The case prompted an internal Navy investigation that resulted in military officials in Washington temporarily suspending the contracting authority of the Naval Undersea Warfare Center. The Navy said a host of contracting problems at the facility enabled the scheme.

Dutta-Gupta has pleaded guilty to paying $8 million in bribes over more than a decade. He's scheduled to be sentenced June 21.

Prosecutors allege money was also funneled to Mariano through businesses owned by Spencer. According to court filings, Spencer submitted false and inflated invoices to ASFT for work that, for the most part, was never done and then passed the money along to Mariano while drawing a salary for himself. He pleaded guilty last June to conspiracy to commit bribery.

Spencer also pleaded guilty last month to charges that he lied to investigators about an extramarital affair he had with Ralph Mariano's housekeeper. He is scheduled to be sentenced in December.

Another man, Patrick Nagle, 51, of Marietta, Ga., a former senior vice president and director of contracts for ASFT, pleaded guilty in August to charges of conspiracy to commit bribery. Prosecutors say Nagle signed off on false and inflated invoices that were submitted to his firm by subcontractors from 1999 to June 2010, even though he knew the work had largely not been done. His sentencing is scheduled for July.

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