Former airman pleads guilty to defrauding Air Force of $37 million
A former Air Force master sergeant pleaded guilty to defrauding the Air Force out of $37 million in a scheme surrounding information technology contracts. On Wednesday, Alan Hayward James, 51, pleaded guilty to conspiracy to rig bids, conspiracy to commit wire fraud, and bribery as part of a nine-year-long fraud plot. According to the agreement and the indictment against him, James, who called himself “Al Capone,” took part in the scheme while in the military and after retiring.
And much like the historic Capone, he got caught for the money scheme.
The plot stretched back to at least April 2016 and involved James working with co-conspirators to inflate the price of IT contracts to siphon the gains to himself and others. Between 2014 to 2018, James was an active-duty airman serving as a Contracting Officer’s Representative for Pacific Air Forces. In that role, he represented the Air Force on various contracts tied to IT services. James retired at the end of January 2018, but continued to work with a co-conspirator to draft contract documents for Pacific Air Force, even though he himself was not contracted to help the other person. After leaving the Air Force, James also told his co-conspirators how to bid on contracts to get around the required competitive bidding process. The scheme relied heavily on shell companies to move the money around, including one called T.R.A.P. LLC that James set up while still in the Air Force.
Top Stories This Week
Right to repair: Why the US military can’t fix much of its own equipment
Army approves combat patches for soldiers in Iran war zone
By Patty Nieberg, Nicholas Slayton
Pentagon looks for vendors to supply pre-made bunkers within 30 days
The scheme was lucrative, bringing in tens of millions of dollars. Per the court documents, James kept track of the siphoned excess money in a series of ledgers, which the government obtained. In the ledgers, James called himself “Al Capone” in reference to the infamous gangster and referred to another conspirator as “Godfather.” Alongside referring to himself as Capone, James used the nicknames “Capone M” and “Capone D” to refer to his mother and father. They also used public funds to book a trip to a resort in Hawaii in 2023, which included golfing, massages and other luxury perks.
“Through this bid-rigging scheme, the defendant not only stole from American taxpayers and harmed companies seeking to compete honestly for government contracts, he also ultimately harmed essential military services designed to keep our nation safe by diverting resources away from other services,” U.S. Attorney Ken Sorenson for the District of Hawaii, said in a Department of Justice release.
James is set to be sentenced in the fall. The charges come with a combined penalty of up to 45 years in prison. As part of his guilty plea, James agreed to pay more than $1.4 million back to the Department of Defense.