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Contractor gets 6+ years in Pentagon fraud case

Monday, March 02, 2009

By MEG KINNARD, Associated Press Writer

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COLUMBIA, S.C. — 

The owner of a defunct South Carolina company was sentenced Monday to 6 1/2 years in prison for bilking the Pentagon out of $21 million she obtained by inflating military equipment shipping costs.

"Your Honor, I messed up. I messed up really bad," Charlene Corley told U.S. District Judge Margaret Seymour before she was sentenced. "I want to apologize and say I'm really sorry."

Seymour also ordered Corley, who pleaded guilty in 2007 to conspiracy to commit wire fraud and conspiracy to commit money laundering, to pay $15.5 million in restitution to the Defense Department.

"The money was taken at a time when our country was at war," Seymour said, in handing down Corley's sentence.

From 1997 to 2006, prosecutors say Corley and her twin sister Darlene Wooten used their plumbing and hardware equipment supply company to exploit an automated payment system designed to speed shipments bound for U.S. forces overseas, submitting huge bills to ship inexpensive items.

Prosecutors said fraudulent charges made through their West Columbia-based company, C&D Distributors, included ones for nearly $1 million to ship two 19-cent lock washers and almost $500,000 to ship an $11 threaded plug.

"This was all because they wanted to live large at the government's expense," Assistant U.S. Attorney Debbie Barbier told the judge. "Every U.S. taxpayer is going to pay for their fraud."

Among the sisters' extravagant purchases were matching $96,000 Mercedes-Benz luxury cars, a $250,000 box at Clemson University's football stadium, four beach houses and hundreds of thousands of dollars in jewelry, prosecutors said.

"Mrs. Corley put her obscene, personal pleasure well ahead of her responsibility to act professionally and honestly in contracting with the government," Assistant U.S. Attorney Kevin McDonald said.

Corley's attorneys had argued that most responsibility in the scheme belonged with Wooten, who handled bidding and shipping for the company. After she was contacted by investigators, Wooten committed suicide in October 2006, leaving behind a $4 million check made out to the Defense Department.

Corley's supporters packed a Columbia courtroom during Monday's hearing, which lasted more than three hours. Several people testified about her good deeds, including efforts with youth in her church. Her attorneys also played a 10-minute DVD in which educators praise Corley's work with an autistic boy at an elementary school.

"For as awful as this crime is, Charlene Corley is not an awful person," Cheryl Lydon said, arguing that Corley has already suffered immeasurable grief since Wooten's death.

Corley had faced up to 40 years in prison. Prosecutors have said the government has been repaid $4 million and seized an additional $7 million in cash and other assets, including beach houses and other land.

Seymour said Corley would be allowed to remain free on bond and added she would recommend Corley be assigned a prison in Florida, where her family lives.

Corley's family and attorneys declined comment on her sentence, which prosecutors said was appropriate for her crimes.

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