From the U.S. Attorney’s Office in Baltimore:
United States District Judge Catherine C. Blake sentenced John Kays, age 44, of Pinehurst, North Carolina (formerly of Bel Air, Maryland) to six years in federal prison, followed by three years of supervised release, for accepting bribes of $800,000 from 2009 to 2012 related to contracting at the U.S. Army Communications-Electronics Command headquartered at Aberdeen Proving Ground (APG), in Harford County, Maryland. Judge Blake also ordered forfeiture in the amount of $631,705, as well as restitution of at least $886,519.52.
Kays’ wife Danielle Kays, age 43 and Matthew Barrow, age 44, of Toledo, Ohio were also charged in the scheme and have pled guilty. Danielle Kays is presently serving an 18-month sentence with the Bureau of Prisons. Barrow is awaiting sentence.
The sentence was announced by United States Attorney for the District of Maryland Robert K. Hur; Special Agent in Charge Robert E. Craig, Jr. of the Defense Criminal Investigative Service – Mid-Atlantic Field Office; Special Agent in Charge L. Scott Moreland, Mid-Atlantic Fraud Field Office, Major Procurement Fraud Unit, U.S. Army Criminal Investigation Command; and Special Agent in Charge Gordon B. Johnson of the Federal Bureau of Investigation, Baltimore Field Office.
In March 2006, the U.S. Army Contracting Command at APG awarded a 10-year, $19.2 billion contract to seven prime contractors to provide technology services to support the integrated engineering, business operations, and logistics needs for the Army. John and Danielle Kays each had leadership positions as civilians at APG related to this contract.
According to court documents, John Kays, Danielle Kays, and Barrow all graduated from West Point together. In 2008, John Kays and Danielle Kays had leadership positions within CECOM as civilian employees of the Army. Barrow worked for a glass manufacturer in Toledo, OH. Barrow formed a company called MJ-6, to which John Kays admitted that he steered CECOM subcontracts in exchange for money.
According to the plea agreements, from August 2008 to June 2014, John Kays agreed to take official actions favorable to Barrow and MJ-6 in return for Barrow paying them a total of approximately $800,000. Mrs. Kays has admitted using her official position to benefit Barrow and MJ-6 during the period from 2011to 2014. Specifically, the Kays used their official positions to add MJ–6 as a subcontractor acceptable to the Army, steer potential employees for government contractors to work for MJ-6, approve MJ-6 employees to work on various Task Orders, and approve the pay rates, status reports, and travel reimbursements for MJ-6 employees. Total contracts steered to MJ-6 by the Kays exceeded $21 million.
In order to conceal his corrupt relationship with the Kays, Barrow caused the glass company he worked for to enter into contracts and make payments to Transportation Logistics Services, LLC, a company incorporated by John Kays, until the glass company fired Barrow. Barrow then made payments to the Kays in cash, which Barrow withdrew from his personal accounts and from MJ-6 accounts. To conceal the scheme, John and Danielle Kays made false statements on the government ethics forms that they were required to file by failing to disclose the cash payments received from Barrow. The Kays used the cash for their personal benefit, including payments for home renovations, two new vehicles, a powerboat, jewelry, a pool party at their country club, and credit card bills.
Barrow later agreed to pay the Kays the proceeds of the scheme from MJ-6 disguised as employment salary.
The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention, and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs. The Procurement Fraud Task Force includes the United States Attorney’s Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.
United States Attorney Robert K. Hur thanked the Defense Criminal Investigative Service, the Army Criminal Investigation Command, and the FBI for their work in the investigation. Mr. Hur praised Assistant U.S. Attorneys Joyce K. McDonald and Harry M. Gruber, who are prosecuting the case.