VIRGINIA BEACH — A Navy officer here admitted Monday to his role in a $2.7 million “procurement fraud scheme,” and to lying on his federal income tax return.
Randolph M. Prince, 45, pleaded guilty to wire fraud and making a false statement in connection with his 2014 tax return, according to the U.S. Attorney’s Office for the Eastern District of Virginia.
He faces a maximum of 20 years in prison when sentenced on Dec. 3.
According to court documents, “Prince defrauded the Navy out of more than $2.7 million through a procurement fraud scheme in which he, as a member of his Navy unit’s supply staff, steered government contracts to sham companies who were created and run by his friends.”
Federal prosecutors said Prince had the authority to make purchase requests for military equipment on behalf of his command, and also had the ability to sign for goods when a company delivered them to his unit on the back end.
“Prince took advantage of his position to direct purchases to the sham companies, which had been opened for the sole purpose of receiving government contracts from Prince,” said G. Zachary Terwilliger, the U.S. Attorney for the Eastern District of Virginia, in a news release. “When a contract landed on the desk of one of these companies, Prince, and others, would generate fraudulent documentation to suggest the company had honored its end of the bargain.”
With the documentation in hand, the Navy would then pay the company. However, the sham companies never provided the Navy with anything at all. Instead, they distributed the Navy money among Prince and his associates, the U.S. Attorney said.