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Once sailor, forever sailor

Monday, October 17, 2016

U.S. Army Captain gets 30 months for war-zone fraud

Captain Michael Dung Nguyen
A U.S. Army Captain who stole $690,000 in Iraq reconstruction cash was creating a secret fund to make unauthorized condolence payments on behalf of Iraqi allies, according to a federal prosecutor.
But Captain Michael Dung Nguyen’s plan unraveled when his fund outgrew the need for such payments. To avoid accounting for the surplus, Nguyen shipped the cash home and spent it on flashy cars, flat-screen televisions, laptop computers and leather furniture.
“He ended up with an excess of funds and was faced with some challenging decisions on how to account for that and what to do with it,” said Susan Russell, Nguyen’s defense attorney. “He made a terrible decision in acting with those excess funds that had accumulated in appropriating them to himself.”
Nguyen, a 28-year-old West Point graduate stationed at Fort Lewis, Wash., was sentenced to 30 months in prison on May 3 in a Portland, Ore., federal court. He previously pleaded guilty to stealing government property and structuring financial transactions.
Judge Ancer L. Haggarty watched two short videos Nguyen created, one a montage of reconstruction projects Nguyen shepherded and the other a tribute to 16 soldiers in Nguyen’s unit killed in Muqdadiyah, Iraq, a city northeast of Baghdad.
Haggarty allowed Nguyen to address the court, and he recounted the brutal defense of his thesis at West Point. His mentor and thesis adviser, he said, barely passed him and admonished him to take responsibility for his actions.
“I know he would today be ashamed of what has become of me, but he would understand and accept that I’m taking responsibility for my actions,” Nguyen said. “I hope I do him justice in the future.”
Nguyen was the civil affairs officer for Headquarters Company, 2nd Battalion, 23rd Infantry Regiment, “Tomahawks” 4th Stryker Brigade Combat Team, as the unit worked to oust insurgents from Muqdadiyah, then a Sunni stronghold.
From April 2007 to June 2008, Nguyen used money from the Commander’s Emergency Response Program to hire local Sunni militias, known as the “Sons of Iraq,” and for reconstruction projects — a school, a medical facility and a dairy were among other projects depicted in the video.
CERP, to which Congress has given $4.6 billion as of fiscal 2008, is meant to give commanders in Iraq and Afghanistan a tool for aiding urgent reconstruction and security projects. However, it suffered in its early days from gaps in oversight, according to recent audit by the Office of the Special Inspector General for Iraq Reconstruction.
Russell, said that Nguyen was placed solely in charge of $11 million with little training or supervision. He worked under “very, very dangerous and challenging circumstances,” and struggled with the loss of his fellow soldiers, which contributed to his “terrible error in judgment in this case.”
Russell and Assistant U.S. Attorney Scott Asphaug told Army Times that Nguyen tucked away CERP cash for an unauthorized use, to make condolence payments on behalf of the “Sons of Iraq,” and that the need was ultimately less than the amount Nguyen cached.
U.S. forces can make condolence payments to compensate the families of civilians killed by American troops, but typically do not do so for those killed by foreign troops.
“Captain Nguyen went through some novel efforts to supplement outside the lines in order to protect U.S. interests, in order to maintain security and in order to ensure that the civil population continued to work with the U.S. Army [to identify] threats to U.S. Army and its personnel,” Russell said.
As Nguyen’s deployment wound down, between June 2008 and February 2009, he mailed the cash to his Oregon home. Back in the U.S., he tried to elude IRS reporting rules by spreading small deposits among various banks, and he made a number of purchases: a 2009 Hummer H3T, a 2008 BMW M3, a Bowflex set and a PlayStation 3, among other items.
The Portland IRS office noticed Nguyen’s purchases and deposits, and Nguyen was arrested in March 2009.
Asphaug conceded that Nguyen “did a lot of good” in Iraq, but ultimately failed a test of integrity. He said military personnel, including West Point graduates, have called him and expressed a “sense of betrayal.”
“That is what he learned at West Point and that is, in essence, his integrity,” Asphaug said. “The temptation was too great. He stole almost $700,000 in money — of the government’s. He sent it home. He spent it foolishly.”
Nguyen was cooperating to give the money and property to the government. In court, Asphaug said funds will be returned to the Defense Department.
Nguyen is expected to begin his sentence Sept. 1 at Federal Correction Institution Sheridan.
He told the court that he planned to resign his commission: “I would like to quickly resign and move on,” Nguyen said.
Source: Army Times
By Joe Gould - Staff writer
===
Captain Michael Dung Nguyen

The Oregonian (by: Stuart Tomlinson) - An Army captain from Beaverton stole nearly $700,000 in cash from an emergency fund while stationed in Iraq and shipped it in boxes back to Oregon, federal prosecutors say.
When he returned to the states, he went on a spending spree, buying expensive cars, appliances and furniture.
Federal Magistrate Paul Papak released Capt. Michael Dung Nguyen, 28, assigned to Fort Lewis, Wash., back to his unit after a hearing Thursday in U.S. District Court. His trial is scheduled for May 5.
A grand jury indicted Nguyen on charges of theft of government property, structuring financial transactions and money laundering. He pleaded not guilty.
The maximum penalty for each charge is 10 years in prison and a $500,000 fine.
Prosecutors said Nguyen was not a flight risk, but he did surrender his civilian passport. As a condition of his release, he can't possess weapons and must notify the court if his unit is deployed.
Dan Wardlaw, a spokesman for the Internal Revenue Service, said his office started the investigation after it became clear that Nguyen was living beyond his military pay.
"Buying a brand-new BMW and a Hummer will attract attention," Wardlaw said.
The IRS, the Army and the FBI cooperated in the case. Agents discovered "large and frequent currency deposits and substantial expenditures above Captain Nguyen's legitimate income level," according to U.S. Attorney Karin Immergut.
On Thursday afternoon, soon after the court session ended, Nguyen's SUV was parked in the driveway of his home along Southwest Telluride Terrace, but no one answered the door.
Neighbors in the two-story, brick-and-stone homes in the Sexton Mountain neighborhood said they didn't know the family well, but noted there were always a lot of cars and people at the house.
Prosecutors allege that while stationed in Iraq between April 2007 and June 2008, Nguyen, acting as battalion civil affairs officer, stole more than $690,000 in cash from the Commander's Emergency Response Program.
The money was designated to help military commanders provide urgent humanitarian relief as well as pay for construction projects and other programs to assist people in Iraq and Afghanistan.
The indictment alleges that when he returned to the states in June 2008, Nguyen opened bank accounts and deposited the cash in small amounts to avoid detection. Federal officials said that at any one time, Nguyen had at least $300,000 in cash locked in a safe, most in bundles of uncirculated $100 bills.
He also attempted to launder the cash by buying a 2008 BMW M3 for $70,000 and a 2009 Hummer H3T for $43,000, prosecutors contend. Agents seized both vehicles, along with computers, electronics, two handguns, furniture, appliances and cash. Additional items were seized from an apartment in Lakewood, Wash.
In all, Immergut said, agents recovered about $436,000 in cash and merchandise.
Nguyen, a 2004 graduate of the U.S. Military Academy at West Point, N.Y., was assigned to the 4th Stryker Brigade Combat Team, 2nd Infantry Division.
Assistant U.S. Attorney Scott Asphaug said Captain Nguyen surrendered Thursday morning to U.S. marshals in Portland.
"As an officer of the U.S. Army, and a graduate of West Point, Captain Nguyen agreed to uphold the principles of 'Duty, Honor, Country,'" Immergut said.
"By stealing money intended to assist Iraqi citizens, Captain Nguyen betrayed his country and the fine men and women of our nation's armed services."

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