Military

Crooked Kickback Scheme Targeted Marine Wounded Warrior Program

October 27, 2022Carl Prine
Cpl. Murphy Houston, a Marine amputee assigned to Wounded Warrior Battalion East - Detachment Bethesda, stands on crutches welcoming home Marines of 1st Battalion, 12th Marine Regiment, after they returned from Afghanistan's Helmand province on Nov. 24, 2011. A Virginia-based contractor was ordered Oct. 24, 2022, to pay more than $1 million to settle civil penalties in a kickback scheme targeting the Wounded Warrior program. US Marine Corps photo by 1st Lt. Brian Tuthill.

Cpl. Murphy Houston, a Marine amputee assigned to Wounded Warrior Battalion East - Detachment Bethesda, stands on crutches welcoming home Marines of 1st Battalion, 12th Marine Regiment, after they returned from Afghanistan's Helmand province on Nov. 24, 2011. A Virginia-based contractor was ordered Oct. 24, 2022, to pay more than $1 million to settle civil penalties in a kickback scheme targeting the Wounded Warrior program. US Marine Corps photo by 1st Lt. Brian Tuthill.

A federal judge has slapped a Virginia defense contractor with more than $1 million in penalties for its role in a kickback scheme tied to a program that was supposed to help America's most vulnerable Marines.

On Monday, Oct. 24, US District Judge Rossie D. Alston ordered Management Consulting, Inc. — better known as Mancon — to forfeit $1,088,802.92.

That was a portion of the more than $4 million in illegal bribes a Mancon subcontractor's ex-senior vice president, convicted fraudster Brodie Shaw Thomson, reaped from other companies seeking a piece of the $265 million Wounded Warrior Program pie.

Thomson, 47, is slated to exit Oregon’s medium-security Federal Correctional Institution Sheridan in 11 months.

Wounded Warrior Program Kyle Carpenter

Medal of Honor recipient Cpl. William “Kyle” Carpenter addresses service members with Warrior Wounded Battalion West during a visit to Camp Pendleton, Calif., June 23, 2014. Carpenter earned the nation’s highest military award for his actions in Helmand province, Afghanistan, in 2010. He saved another Marine’s life by shielding him from a grenade blast during an enemy attack. US Marine Corps photo by Lance Cpl. Ricardo Hurtado.

"Mancon has been providing services to the US. Department of Defense since 1983 under dozens of contracts and thousands of task orders having employed thousands of US citizens to assist in keeping our military running as efficiently and effectively as possible," said Mancon' s attorney, Jonathan V. Gallo, in a prepared statement emailed Monday to Coffee or Die Magazine. "While Mancon understands the rule of law, it does not believe the decision is fair or just in this case. Having graduated from a small business to a large business, Mancon is required to subcontract a significant amount of work to small businesses. "

Thomson's corruption began in 2008, shortly after the US Department of Health and Human Services knighted Mancon the prime contractor providing recovery care coordinators and other services to the Marine Corps’ Wounded Warrior Program.

At the time, Marines were battling twin insurgencies in Afghanistan and Iraq. The program served Marines who were too wounded, ill, or injured to round out active-duty battalions.

Mancon subcontracted its work to Thomson's Armed Forces Services Corp., which farmed more of the duties to Special Media Enterprises LLC, better known as SpecMed.

Wounded Warrior Program

Lt. Gen. Thomas Waldhauser, the commander of Marine Corps Forces Central Command, speaks with a patient at the new Concussion Restoration Care Center, May 7, 2011, in Afghanistan's Helmand Province. It was considered a key part of the Marine Corps' Wounded Warrior care system. US Marine Corps photo by Lance Cpl. Bruno Bego.

But it was rigged. SpecMed bribed Thomson for the purchase orders and subcontracting work. 

To fund the kickbacks, Shaw told SpecMed to mark up its invoices to Armed Forces Services Corp. on the Health and Human Services contract.

But the corruption didn’t end there. SpecMed was also paying off a pair of Armed Forces Services Corp. executives, Sarah Hackett Kim and Nicole Bazemore, according to the judge’s ruling.

Armed Forces Services Corp. has repaid the federal government $4.3 million and forfeited another $162,646.98 in property to resolve its civil penalties under both the False Claims Act and the Anti-Kickback Act.

But Mancon balked at doing the same thing. That’s because Mancon’s employees insisted they didn’t know anything about subcontractor Thomson’s corruption.

Wounded Warrior Program

US Marine Staff Sgt. Sean O'Leary, assigned to California's Wounded Warrior Battalion West: Twentynine Palms Detachment, plays bingo with 2nd graders at Onaga Elementary Nov. 14, 2013. US Marine Corps photo by Lance Cpl. Alejandro Bedoya.

And if Mancon had to pay fines, they should be offset by what Armed Forces Services Corp. already paid out, the company’s attorneys argued. 

"Mancon and its employees were not aware of, did not participate in, and did not benefit from the kickback scheme and since the costs of the kickbacks were not passed on to the US government, Mancon did not charge, and the US government did not pay, any more under the contracts for which Mancon was the prime contractor," said attorney Gallo in his prepared statement. "The US government presented no evidence to dispute these facts. Nevertheless, the US government sought recovery against Mancon under the strict liability provision of the Act, despite Mancon having no knowledge of or participation in the kickback scheme."

Judge Alston ruled that federal lawyers never needed to prove actual negligence or any intent to harm the taxpayer because these were strict liability crimes.

The feds also shouldn’t subtract from Mancon’s bill what subcontractors had already paid back to the government. In fact, fining Mancon was necessary because it deterred other companies from shaking down future subcontractors for a piece of a program, the judge reasoned.

To Alston, if subcontractors sluiced $1,088,802.92 in bribes to Thomson, then the primary contractor, Mancon, should pay the same sum back.

Federal investigators estimated they spent more than $711,000 probing the corruption of Thomson and the subcontractors.

Editor's Note: This story was altered to add a statement from defendant Mancon's attorney.

Carl Prine
Carl Prine

Carl Prine is a former senior editor at Coffee or Die Magazine. He has worked at Navy Times, The San Diego Union-Tribune, and Pittsburgh Tribune-Review. He served in the Marine Corps and the Pennsylvania Army National Guard. His awards include the Joseph Galloway Award for Distinguished Reporting on the military, a first prize from Investigative Reporters & Editors, and the Combat Infantryman Badge.

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