Kevin Mahler, Kickback Scheme, Alaska 2021

Kevin Mahler, a former project manager for a government contractor, pleaded guilty to his role in a conspiracy to inflate project costs by over $200,000 and receive kickbacks related to contracts for commercial flooring services at a U.S. Army facility in Fairbanks, Alaska.

Mahler pleaded guilty to a six-count felony information filed on Jan. 29, in the U.S. District Court for the District of Alaska. According to the plea, from March 2016 to March 2021, Mahler conspired to receive kickbacks from Benjamin McCulloch, the owner of a commercial flooring services company, related to construction contracts administered by the U.S. Army at Fort Wainwright.

During the five-year scheme, Mahler received over $100,000 in kickbacks. As a part of his plea, he has agreed to pay restitution. According to the information, Mahler also failed to report his income from the scheme to the IRS, in violation of federal tax laws. McCulloch previously pleaded guilty for his role in the conspiracy.

“Taking advantage of U.S. taxpayers by defrauding U.S. Army facilities is a crime and will not be tolerated,” said Deputy Assistant Attorney General Manish Kumar of the Antitrust Division. “The Antitrust Division’s Procurement Collusion Strike Force will hold accountable individuals who conspire to illegally profit — through kickbacks or otherwise — at the expense of the public.”

“We are very pleased with today’s announcement,” said Special Agent in Charge Keith K. Kelly of the Department of the Army Criminal Investigation Division’s Fraud Field Office. “This is a true testament to our continued commitment to work closely and seamlessly with our outstanding fellow law enforcement agencies to help bring those to justice who attempt to defraud the U.S. Government and U.S. Army.”

Mahler faces a maximum penalty of 10 years in prison and a fine of $250,000. The fine for the anti-kickback conspiracy charge may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The Antitrust Division’s San Francisco Office, U.S. Attorney’s Office for the District of Alaska, FBI Anchorage Field Office, DCIS’s Western Field Office in Seattle and IRS:CI Seattle Office are investigating the case.

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