IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF COLUMBIAUNITED STATES OF AMERICA:CRIMINAL NO. 10-00266 (RBW):v.::VIOLATIONS:NICOLE SHANTELLE SMITH,:18 U.S.C. § 641 (Theft of :Government Property)Defendant.:
__________________________________________
:GOVERNMENT’S MEMORANDUM IN AID OF SENTENCING
The United States by and through its attorney, the United States Attorney for the Districtof Columbia, hereby submits the following memorandum in aid of sentencing. Consistent withthe advisory sentencing Guidelines and the factors set forth in 18 U.S.C. Section 3553(a), theGovernment respectfully requests that this Court sentence defendant to a period of incarcerationbetween 37 and 46 months and order her to pay restitution in the amount of $1,885,650.I.
FACTUAL BACKGROUND
The United States General Services Administration ("GSA") is the primary acquisitionarm of the federal government. GSA is headquartered in Washington, D.C. and providesnumerous services to other federal agencies. GSA's primary services include constructing,managing and preserving government buildings, and acquiring equipment, vehicles, supplies,telecommunications, professional services and information technology for governmentorganizations including the military. The Public Buildings Service (PBS) division of GSA isspecifically responsible for the acquisition, construction, and management of buildings and otherreal estate to be used by customer federal agencies.In 1995, NIH entered into an interagency agreement with GSA for assistance in theconstruction and renovation of research centers throughout its main campus in Bethesda,
Case 1:10-cr-00266-RBW Document 13 Filed 01/14/11 Page 1 of 14
Maryland ("NIH Project"). NIH funded the project through an appropriation of $670 millionfrom Congress. Among the centers to be renovated were research facilities for the Office of Research Services ("ORS"),
1
the National Institute of Diabetes and Digestive and KidneyDiseases ("NIDDK"),
2
the National Institute on Deafness and Other Communication Disorders("NIDCD"),
3
and the National Institute of Dental and Craniofacial Research ("NIDCR").
4
To manage the contract administrative process, GSA hired contractors. GSA trackedacquisitions and payments to prime contractors using Reimbursable Work Authorization("RWA") fund accounts. For the NIH Project, GSA established individual RWA fund accountsfor each NIH center under renovation. For example, GSA established a specific fund account forthe ORS project, which was known as the ORS fund account.Among the prime contractors who provided contract administrative services to GSAunder the NIH Project were Washington Business Group ("WBG") and Project Support Services("PSS"). WBG, a certified minority-owned small business headquartered in Washington, D.C.,had fewer than 50 employees. PSS, a service-disabled, veteran-owned small business, had
1
ORS plans and directs service programs for public safety and security operations,scientific and regulatory support programs, and a wide variety of other program and employeeservices.
2
NIDDK conducts and supports basic and applied research and provides leadership for anational program in diabetes, endocrinology, and metabolic diseases; digestive diseases andnutrition; and kidney, urologic, and hematologic diseases.
3
NIDCD conducts and supports biomedical research and research training on normalmechanisms as well as diseases and disorders of hearing, balance, smell, taste, voice, speech, andlanguage that affect 46 million Americans.
4
NIDCR provides national research designed to understand, treat, and ultimately preventthe infectious and inherited craniofacial-oral-dental diseases and disorders that compromisemillions of human lives.2
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offices in Virginia and Florida.. It was not uncommon for prime contractors like WBG and PSSto retain subcontractors to satisfy their contractual obligations to GSA. The prime contractorsreceived payment directly from GSA and subsequently dispersed the funds to the appropriatesubcontractor. These contract employees function in a variety of important capacities and areentrusted with unique access to otherwise government exclusive databases.In 1998, defendant
SMITH
began working at GSA under various prime contractorsincluding WBG and PSS.
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Her immediate supervisor was GSA Contracting Officer E.V. and herprimary duties included: (1) preparing funding and task order documents; (2) gathering andreviewing solicitation proposals from prime contractors; (3) accurately implementing and closingall NIH Project RWAs in the GSA acquisition system; and (4) initiating and approving thepayment of work orders by confirming that the contracted services were rendered to thegovernment. To perform her duties, GSA granted defendant
SMITH
access and usage rights tovarious government databases, including GSA's contractor invoice database (VITAP), GSA's
5
In 2001, defendant
SMITH
started her own business, NTT Consulting LLC ("NTT"),with a childhood friend, S.C., who was also working at GSA for a subcontractor. NTT became asubcontractor to WBG and PSS on contracts these prime contractors maintained with GSA. Inshort, NTT replaced those companies who had employed defendant
SMITH
and S.C. Defendant
SMITH
served as NTT's Chief Executive Officer and S.C. was NTT's President Defendant
SMITH
and S.C.were equal owners of NTT. Defendant
SMITH,
however
,
controlled theoperations. Defendant
SMITH
prepared and maintained the business records, financialstatements and partnership income tax returns. She also signed and authorized payroll andvendor payments, deposited payment receipts and was the point of contact with GSA contractors.For the calendar years 2003 through 2008, defendant
SMITH
paid herself $1,362,581 from NTTConsulting, while her business partner, S.C., received approximately $649,017. Defendant
SMITH
also received monthly compensation of $1,500 from Interior Systems Inc (“ISI”) forconsulting work between 2003 and 2006. ISI, a service-disabled, veteran-owned small businessbased in Washington, D.C., provided services that included administrative services to federalgovernment agencies.3
Case 1:10-cr-00266-RBW Document 13 Filed 01/14/11 Page 3 of 14
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