Officer who stole $690K in Iraq nabbed by IRS - Army News | News from Afghanistan & Iraq - Army Times

Officer who stole $690K in Iraq nabbed by IRS

Capt. Michael D. Nguyen was entrusted with hundreds of thousands of dollars in Iraq reconstruction aid. He betrayed that trust.

The 29-year-old West Point graduate stole $690,000 to buy a luxury laundry list of flashy cars, widescreen televisions, BowFlex home gym equipment, guns, electronics and furniture, according to federal authorities.

Nguyen pleaded guilty in federal court Dec. 7 to charges he stole government property and illegally structured transactions during his deployment to Diyala province in 2007 and 2008. He faces up to 20 years in prison, $500,000 in fines and a likely end to his career. What’s more, as part of his plea agreement, Nguyen must pay back all of the money he stole.

The Fort Lewis, Wash., soldier’s sentencing is set for March 1, 2010 in a U.S. District Court in Portland, Ore.

The federal government seized $309,200 in cash that Nguyen had stashed in his attic, the contents of his bank accounts, and dozens of items purchased with his loot. Court papers list a 2009 Hummer H3T sport utility vehicle, a 2008 BMW M3 car, a BowFlex dumbbell set, treadmill and all-in-one exercise machine, a 60-inch flat-screen and four other TVs, leather dining room and living room sets, a refrigerator, two laptops and a Playstation 3.

The cash was part of his battalion Commander’s Emergency Relief Program, or CERP, meant to give commanders in Iraq and Afghanistan a tool for aiding urgent reconstruction and security projects. The program, to which Congress has given $4.6 billion as of fiscal 2008, suffers from gaps in oversight, according to a recent audit by the Office of the Special Inspector General for Iraq Reconstruction.

Nguyen, commissioned in 2004 and a Ranger school graduate, was the civil affairs officer for the headquarters company of the 2nd Battalion, 23rd Infantry Regiment, 4th Stryker Brigade Combat Team, 2nd Infantry Division, from April 2007 to June 2008.

Nguyen was in Muqdadiyah, a city northeast of Baghdad, as the 4th SBCT executed major operations to oust al-Qaida in Iraq from Diyala’s cities and villages, and bolster Iraqi security forces. The 4th aided rebuilding and recruited local militias to combat al-Qaida in Iraq after coalition forces’ planned exit, according to the Institute for the Study of War.

The battalion safe at any time held $300,000 in stacks of uncirculated $100 bills for CERP disbursements, and Nguyen was given sole access, according to a federal grand jury indictment. His duties included supervising these payouts, including $300,000 per month for the local militias, known as the “Sons of Iraq.”

Nguyen pocketed the money as his deployment was winding down, between June 2008 and February 2009, and mailed it to his Oregon home. Once he returned, he tried to elude federal scrutiny by scattering the cash in four different bank accounts, court papers state.

Though his deposits totaled $387,550, he never deposited more than $10,000 at a time. More would have required he file paperwork with the IRS, authorities said.

Nevertheless, Nguyen’s high-living lifestyle and frequent, large deposits did catch the eye of the Portland IRS office. Its investigation — joined by the FBI, the Army Criminal Investigation Division’s Major Procurement Fraud Unit, and the Defense Department’s Criminal Investigative Service — led to Nguyen’s arrest March 5.

Teri Alexander, the assistant special agent in charge of the Portland office of IRS Criminal Investigation, cautioned soldiers facing temptation to “do the right thing.”

“I can see where it might be tough sometimes, but the long-term consequences might be far reaching,” said Alexander. “The consideration when you get snared up in something like this is it not only impacts you personally, it impacts your family — potentially long term — the people you work with, and obviously, our country.”

According to the Fort Lewis staff judge advocate’s office, the post’s command has no plans to pursue military charges against Nguyen, as the federal charges are “sufficient.”

Nguyen was assigned to perform nonsensitive duties within his unit while the investigation was underway, the post said in a prepared statement.

“The Army is a values-based organization, and these were serious allegations,” the statement reads. “In light of his plea … the nature of the charges has been adjudicated, which clears the way for his unit's chain of command to consider questions regarding his military status. However, any decisions are pending a thorough review of the case and its disposition by his command.”