Marine Corps Officer Jailed for Iraq Fraud

A U.S. Marine captain who last year pleaded guilty to skimming nearly $1.7 million from government contracts in Iraq was sentenced to six years in federal prison on Monday.

Eric Schmidt, aged 40, of the First Marine Division, pleaded guilty in May to conspiracy to commit wire fraud and filing a false tax return with the U.S. Internal Revenue Service.

His wife Janet, aged 39, pleaded guilty to a tax offence for failing to report the income she received from her illicit dealings. She faces up to three years behind bars and is due to be sentenced on 7th March.

Prosecutors say Schmidt, who was deployed to Iraq in 2008, used his position to steer business to an Iraqi contractor, the Al-Methwad Company.

Once Al-Methwad had been awarded the contracts, prosecutors say, Janet Schmidt used money from Al-Methwad to purchase fewer or inferior goods than those required by the contract and arranged for their delivery to Marines in Iraq.

Prosecutors say the Schmidts caused the U.S. Defense Department to suffer losses of $1.69 million, and the Internal Revenue Service to suffer losses of more than $450,000. They were ordered to pay full restitution to both agencies.

During the course of the investigation, government agents seized two California properties, two luxury vehicles and about $40,000 in cash from the couple.

"The Schmidts defrauded U.S. taxpayers, cheated the Iraqi people and betrayed the trust placed in them," said Stuart Bowen, attorney for the Special Inspector General for Iraq Reconstruction. "They will now pay a price for their criminal wrongdoing."

(Sources: Reuters, AFP, Marine Corps Times)

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