A former active-duty Master Sergeant of the U.S. Air Force pleaded guilty yesterday to fraudulently inflating the cost of information technology (IT) contracts for the U.S. Pacific Air Forces (PACAF) by at least $37 million.
Key details of the case
Using the excess funds to enrich himself, enrich co-conspirators, and channel bribes to a federal public official in PACAF whom the conspirators nicknamed “Godfather.”. The defendant, Alan Hayward James, 51, of Texas, pleaded guilty to conspiracy to commit wire fraud, bribery, and conspiracy to rig bids. James also agreed to pay over $1.4 million in restitution to the U.S.
Moreover, “Over thirty-seven million dollars — that’s how much the U.S. Air Force overpaid because of the scheme that the defendant admitted to, under oath and in open court.” said Acting Deputy Assistant Attorney General Daniel Glad of the Justice Department’s Antitrust Division. “Criminals who rig bids and commit fraud on government contracts steal from taxpayers and threaten the public’s confidence in government institutions.
Meanwhile, the Antitrust Division’s Procurement Collusion Strike Force will detect and prosecute those who rig bids and defraud their government customers.”. “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,” said U.S. Attorney Ken Sorenson for the District of Hawaii.
Enforcement actions and official statements
In addition, “Bid-rigging and anti-competitive behavior in government contracts erodes trust in our institutions, harms taxpayers, and will not be tolerated. We will continue to investigate and prosecute any and all who would seek to manipulate markets and undermine fair competition for their own personal gain.”. “James’s guilty plea acknowledges his role in a long-running conspiracy to rig bids and defraud the U.S. government for personal financial gain,” said Special Agent in Charge John E.
Helsing of the Department of Defense Office of Inspector General, Defense Criminal Investigative Service (DCIS), Western Field Office. “DCIS, along with our law enforcement partners and the U.S. Department of Justice, will aggressively investigate those who seek to enrich themselves through fraudulent schemes targeting the U.S. For complete details, refer to the official DOJ press release.
Department of Defense and American taxpayers.”. “This case highlights the capabilities and strength of joint investigative efforts to defend and protect sensitive Department of War (DoW) acquisition systems,” said Special Agent Nicole Vanourek of the Air Force Office of Special Investigations (AFOSI), Procurement Fraud. “Ensuring companies adhere to robust contracting requirements is integral to maximizing the Air Force’s lethality and readiness to address evolving security challenges.”.
“Bribery, bid rigging. Wire fraud are not victimless crimes; they erode public trust, distort fair competition, and harm honest businesses who play by the rules,” said Special Agent in Charge Christopher Bjornstad of the U.S. General Services Administration (GSA) Office of Inspector General (OIG) Western Investigations Division. For related coverage, see Robert Bobby Leon Smith III sentenced to over 12 years for $61 million Medicare fraud scheme.
Specifically, “GSA OIG special agents and our law enforcement partners remain committed to pursuing those who engage in procurement fraud.”. According to a plea agreement and information filed in the U.S. District Court in Honolulu, Hawaii, from at least April 2016 until about April 2025, James and his coconspirators falsely inflated the cost of IT contracts serving U.S.
Air Force installations across the Pacific. James and his coconspirators agreed to use the excess funds to pay James, James’ family members, the family of an Air Force civilian employee. Other co-conspirators. For related coverage, see Six pittsburgh-area defendants charged with hate crime and obstruction of justice for late-night antisemitic attack on jewish male — DOJ.
At the same time, as part of this scheme, the conspirators diverted government funds to pay for an all-expenses-paid multi-day stay at a luxury resort on the North Shore of Oahu in 2023. Also, from at least May 2019 until about October 2022, the defendant directed co-conspirators. Who were supposed to be competitively bidding against one another to win government contracts — on the amounts they should bid to circumvent the competitive bidding process.
As a result of the defendant’s actions, the government overpaid for IT contracts by at least $37 million. The maximum penalty for conspiracy to commit wire fraud is 20 years in prison and a $250,000 fine. The maximum penalty for bribery is 15 years in prison and a fine of either $250,000 or three times the monetary value of the bribe, whichever is greater.
The maximum penalty for a conspiracy to rig bids in violation of the Sherman Act for an individual is 10 years in prison and a $1 million fine. The fines may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime if either amount is greater than the statutory maximum fines. James agreed to pay a restitution of at least $1,451,656.80 to the Department of War.
Investigation and prosecution details
A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors. The Antitrust Division’s San Francisco Office and the U.S. Attorney’s Office for the District of Hawaii are prosecuting the case.