PROVIDENCE, R.I. – In a shocking admission, Ralph M. Mariano, a former senior systems engineer with the United States Navy’s Naval Sea Systems Command, pleaded guilty in U.S. District Court to organizing a multi-million dollar Navy fraud scheme.
Mariano, of Warwick, R.I., admitted to directing co-conspirators to bill the Navy for work that was never performed, netting between $7 million and $20 million in fraudulent funds. The scheme, which spanned from 1999 to 2011, involved Mariano’s use of his position at NAVSEA to direct Russell Spencer, a computer software specialist, to submit millions of dollars in fraudulent invoices to Navy contractor Advanced Solutions for Tomorrow (ASFT).
According to court documents, Mariano directed ASFT to pay Spencer the full amount of the false invoices with money ASFT received from the Navy. The total amount of government money falsely obtained and paid to Spencer was approximately $17,957,000. Mariano also admitted to receiving $3,081,671 in Navy funds by checks from Spencer, as well as bi-weekly $3,500 cash payments from 2004 to January 2011.
Mariano used a system of codes to direct Spencer to distribute the government funds to Mariano and individuals close to him. At the time of his guilty plea, Mariano admitted to the court that little or no work was ever performed by Spencer in exchange for the government funds he received. Spencer billed ASFT upwards of $200,000 per month for work he spent very little time performing.
In addition to Mariano, several other individuals were involved in the scheme, including his father, Ralph Mariano, Jr., who received $2,567,028 in government funds; his brother, Joseph Mariano, and his companies, who received $1,692,650; his sister, Michelle Mariano, who received $207,900 through a veterinary laboratory company she controlled; and Anjan Dutta-Gupta, the former CEO of ASFT, who received $2,446,445 through private entities he controlled.
Mariano also admitted to paying $478,880 in government funds to a company owned by Attorney Mary O’Rourke, who pleaded guilty to one count of theft of government property. O’Rourke admitted to submitting false invoices to Spencer from 2005 to 2011 and was paid with government funds for work that was never performed.
Mariano also pleaded guilty to one count of tax evasion, admitting that he failed to report $1,864,910 in income he received from Spencer between 2006 and 2009. He owes the IRS $726,650 as a result.
Mariano and O’Rourke are scheduled to be sentenced on September 5, 2013, by U.S. District Court Chief Judge Mary M. Lisi. Dutta-Gupta, who pleaded guilty to bribery on April 28, 2011, is scheduled to be sentenced on July 25, 2013. Spencer, who pleaded guilty to conspiracy to commit wire fraud on July 25, 2012, is currently serving his sentence.
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Key Facts
- State: Rhode Island
- Category: Fraud & Financial Crimes|White Collar Crime
- Source: DOJ Press Release â†â€â€
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