Fairbanks, AK – Benjamin W. McCulloch, the owner of a commercial flooring company, has admitted to systematically ripping off the U.S. Army. For five years, McCulloch funneled over $100,000 in illegal kickbacks to a co-conspirator employed by a prime contractor working at Fort Wainwright. The scheme inflated the cost of flooring projects, diverting vital funds from national defense and lining McCulloch’s pockets.
The feds say McCulloch wasn’t just padding invoices; he was actively conspiring to defraud the government. Between March 2016 and March 2021, McCulloch knowingly submitted false claims for four flooring construction subcontracts. The extra money wasn’t used for materials or labor – it was pure profit skimmed through illicit payments. McCulloch pleaded guilty to five felony counts on September 22, 2022, in the U.S. District Court for the District of Alaska.
The charges against McCulloch are serious: conspiracy to commit anti-kickback offenses, three counts of submitting false claims, and concealment of material facts. These aren’t minor paperwork errors; they represent a deliberate attempt to undermine the integrity of the government contracting system. Federal prosecutors are seeking a maximum sentence of ten years behind bars and a $250,000 fine – and that’s before considering additional penalties.
The fine for the anti-kickback conspiracy could be even higher. The feds can pursue a penalty equal to twice the illicit gain McCulloch made or twice the loss suffered by the Army – whichever is greater. Restitution will also be demanded, forcing McCulloch to return the stolen funds. This isn’t just about punishment; it’s about recovering taxpayer money.
This wasn’t a solo operation discovered by accident. The investigation was a coordinated effort involving the Antitrust Division’s San Francisco Office, the U.S. Attorney’s Office for the District of Alaska, the FBI’s Anchorage Field Office, the U.S. Army Criminal Investigation Division, the Defense Criminal Investigative Service, and the IRS’s Criminal-Investigation Seattle Office. The sheer number of agencies involved demonstrates the seriousness with which federal authorities view procurement fraud.
The case is part of a broader push by the Department of Justice’s Procurement Collusion Strike Force (PCSF), established in 2019 to combat fraud in government contracting. The PCSF aims to dismantle schemes that rig bids and waste public funds. Kickback schemes like McCulloch’s are a prime target, and the feds are sending a clear message: if you try to steal from the government, you will be caught and prosecuted to the fullest extent of the law. This plea is just one battle in a larger war against public corruption.
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- Category: Fraud & Financial Crimes
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