American Charged in Iraq Scheme an Ex-Con
By MARK SHERMAN, Associated Press Writer
news.yahoo.com
A former U.S. occupation official in Iraq bought real estate, cars, jewelry and home improvements with the kickbacks he received from a businessman who won more than $13 million in reconstruction work, federal authorities say.
Robert J. Stein Jr., 50, of Fayetteville, N.C., and his wife, even used the money pay federal taxes and restitution for Stein's earlier federal fraud conviction, an affidavit made public Thursday said.
Stein faces conspiracy, money laundering, wire fraud and other charges stemming from his alleged role in helping Philip H. Bloom, a U.S. citizen who has lived in Romania for many years, get the Iraqi contracts, federal authorities said Thursday.
More than $630,000 flowed to Stein and others from accounts Bloom controls in banks in Switzerland, the Netherlands and Kuwait, prosecutors said. Bloom, 65, has been charged with conspiracy and money laundering stemming from an investigation that Justice Department officials say could result in additional charges against others.
Stein, who worked for the Coalition Provisional Authority in Iraq, and other CPA officials allegedly helped rig bids for Bloom and three companies he controlled for contracts to do work in Al-Hillah and Karbala, two cities 50 miles to 60 miles south of Baghdad.
Bloom was arrested Sunday at New Jersey's Newark International Airport, while Stein was arrested Monday in Fayetteville, authorities said. They were being held in federal custody, pending hearings in U.S. District Court in Washington beginning next week.
Robert A. Mintz, Bloom's lawyer, said he was reviewing the allegations against his client and had no comment. Stein was represented by a federal public defender in a brief appearance Tuesday in U.S. District Court in Fayetteville. Elizabeth Luck, a spokeswoman for the public defender's office, declined to comment on Stein's case.
Stein was the comptroller and funding officer for the CPA's South Central Region.
Court records show he was convicted in 1996 for defrauding a financial institution. He pleaded guilty and was sentenced to eight months in prison and three years of supervised release. He also was ordered to repay the unidentified institution $45,000.
According to the affidavit supporting the latest charges, he used $200 of the money from Bloom to make a restitution payment. His wife used $5,821 to pay 2001 federal taxes — a payment made in January 2004, the affidavit said.
It is unclear whether CPA officials knew about his prior conviction. Jim Mitchell, spokesman for the special inspector general for Iraq reconstruction, said there was a lack of oversight when the CPA was hiring people because the inspector general's office was not yet in place there.
The U.S.-controlled CPA ran Iraq from shortly after the March 2003 invasion until June 2004. It had final say over spending from the Development Fund for Iraq, made up mainly of Iraqi oil revenues.
Rep. Henry Waxman (news, bio, voting record), D-Calif., said Thursday that the complaints against Bloom and Stein revealed egregious misuse of the money and deserve congressional hearings.
"Now that there is concrete evidence of fraud involving U.S. officials and the Development Fund for Iraq, we have an obligation not to avert our oversight," Waxman wrote Rep. Chris Shays, R-Conn., chairman of a House Government Reform subcommittee that has examined fraud allegations in the U.N. Oil-for-Food program.
The allegations against Bloom and Stein have their roots in audits performed by Inspector General Stuart W. Bowen Jr.
Mitchell said Bowen was working on more than 50 cases involving Iraq reconstruction, and has referred up to a dozen to the Justice Department.
"This is the first case, and there will be more," Mitchell said.
At one point, Bloom allegedly was paying at least $200,000 a month to CPA officials and others, although the affidavit did not say for how long.
Projects won by Bloom's companies included a new police academy for Al-Hillah and renovation of the public library in Karbala. Bloom's Romanian-based companies are Global Business Group, GBG Holdings and GBG-Logistics Division, the affidavit said.
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Associated Press Writer Lolita Baldor contributed to this report.
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