Federal prosecutors are accusing three senior Navy intelligence officials of taking part in an alleged contracting scheme that charged the Navy $1.6 million for homemade rifle silencers that cost only $8,000 to produce, according to court records.
The three officials, whose names were redacted in court documents as “Conspirator #1,” “Conspirator #2” and “Conspirator #3,” have not been charged in the investigation yet, The Washington Post reports. But people familiar with the case said two have been placed on administrative leave.
In court documents filed in the U.S. District Court in Alexandria, Va., prosecutors allege that the three officials arranged for a California auto mechanic to build a series of unmarked and untraceable rifle silencers, which were sold back to the Navy at inflated prices.
The exact use of the silencers has not been revealed, but court papers said one intelligence official told a witness that they were intended for Navy’s SEAL Team Six.
Court records say the silencers were made in an auto repair shop owned by Mark Stuart Landersman, 52, of Temecula, Calif., who was described as a down-on-his-luck mechanic who filed for bankruptcy with his wife in July 2012.
Landersman allegedly tapped former mechanic Carlos C. Robles to make 349 of the silencers, paying him $8,000 for parts and labor, the Washington Post reports.
Landersman then resold the silencers to Navy for $1.6 million through an intelligence contract with CACI, court records say.
Landersman allegedly took the cash and went on a shopping spree in which he bought stock shares in a microbrewery for $100,000 and a restored 1988 Porsche 911 for $49,084, among other vehicles.
He was arrested Oct. 29 and charged with conspiracy to commit wire fraud and to transport unregistered firearms. He was later released on $100,000 bond.
The news of the alleged scheme comes after two Navy admirals reportedly became ensnared in a far-reaching bribery scandal involving the alleged sale of classified information to a Malaysian defense contractor.