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She Billed Pentagon $998,000 to Send two 19-cent Washers to an Army Base; Gets 6 Years

The adult industry could use someone like this to help reclaim lost Internet revenues.

South Carolina- A contractor who pleaded guilty to bilking the Pentagon out of more than $20 million during a nine-year fraudulent billing scheme was sentenced Monday to six years in prison and ordered to repay $15.5 million.

Charlene Corley 48, was sentenced by U.S. District Judge Margaret B. Seymour in Columbia, S.C. Corley also was ordered to serve three years of court-supervised release.

Among the Defense Department payments made to Corley, co-owner of a South Carolina parts distributor, was $998,798 for shipping two 19-cent washers to an Army base in Texas; $455,009 to ship three machine screws costing $1.31 each to Marines in Habbaniyah, Iraq; and $293,451 to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Fla., Pentagon records show.

Attorneys for Corley, 48, said in court documents that most responsibility for a scheme that inflated military equipment shipping costs belongs with her twin sister, Darlene Wooten, the State newspaper of Columbia reported Friday. Wooten killed herself as investigators closed in.

The sisters operated C&D Distributors, a West Columbia-based plumbing and hardware equipment supply company. From 1997 to 2006, prosecutors say Corley, C&D’s managing partner, exploited an automated shipping payment system designed to speed shipments bound for U.S. forces overseas by submitting huge bills to ship inexpensive items.

Corley and Wooten set up fake, mirror accounts at First Citizens bank “to facilitate money laundering to conceal the proceeds of their crimes,” prosecutors alleged.

Prosecutors said in court papers the money was used to buy four beach houses; custom jewelry; vacations to Hawaii, Alaska and the Caribbean; plastic surgery; and “high-end automobiles made by Mercedes and Lexus.”

The government seized the homes, autos, jewelry and other assets and will auction them off. The proceeds will be applied toward the $15.5-million restitution, Assistant U.S. Atty. Kevin McDonald in South Carolina said.

Corley pleaded guilty in August 2007 to conspiracy to commit wire fraud and conspiracy to launder money. Under federal guidelines she could have received a total sentence of 40 years.

Back story, ABC News, August, 2008: Despite pleading guilty and agreeing to forfeit millions of dollars in possessions, a convicted war profiteer is still living the high life and has avoided going to prison. Charlene Corley pleaded guilty in August of last year to conspiracy charges to commit wire fraud and money laundering after she and her sister overcharged the Department of Defense by more than $20 million in excess shipping charges. Corley, however, still has her numerous homes, at least four of them ranging from $600,000 to $900,000, each and part of her collection of cars, which includes at least two Mercedes Benzes.

As owners of C & D Distributors, Corley and her twin sister Darlene Wooten took advantage of the government’s need to expedite supplies to troops in Iraq and Afghanistan. Their scam involved attaching large shipping costs to small, inexpensive items including washers, specialty screws and cotter pins all purchased by the Defense Department.

In one instance, they charged the US government nearly a $1 million to ship a pair of 19-cent washers. Prosecutors say their scheme netted the sisters a windfall of $20.5 million.

Despite the nature of the crime and amount of money involved, Corley remains free for the foreseeable future. All of Corley’s homes and automobiles are slated for seizure by the South Carolina U.S. Attorney’s office, but have yet to be taken from Corley despite her guilty plea last summer.

“It certainly is frustrating that somebody who was caught exploiting the system continues to exploit the system to avoid punishment,” said Winslow Wheeler, director of the Straus Military Reform Project.

Corley’s attorney recently asked for more time to respond to the pre-sentencing report, a request that was granted. There is no sentencing hearing scheduled in the case so Corley will remain out of prison for the foreseeable future.

“We’re not pleased at all with being put into this situation,” lead prosecutor Debbie Barbier told regarding the extension granted to Corley’s attorney.


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