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U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

11\ (JJl

REPORT OF INVESTIGATION (INTERIM)

11 MAY 0 5

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU; HI

COMMAND/NAVAIRSYSCOM/00019

MADE AT/HIHN/NCISFO PEARL HARBOR HI4IIIII .... ~

SPECIAL AGENT

REFERENCE (~), _ _

(A) NCISFO WASHINGTON DC ROI (INTERIM)/190CT02 (CONTAINS EXHIBITS (1) THROUGH (57»

(B) NCISFO WASHINGTON DC ROI (INTERIM)/21JUL03 (CONTAINS EXHIBIT (58) )

(C) NCISFO WASHINGTON DC ROI (INTERIM)/ 7JAN04 (CONTAINS EXHIBITS (59) THROUGH (61»

CD) NCISFO WASHINGTON DC ROI (INTERIM)/24MAR04 (CONTAINS EXHIBITS (62) - (66»

(E) NCISFO WASHINGTON DC ROI (INTERIM)/17JUL04 (CONTAINS EXHIBITS (67) - (70»

(F) NCISFO WASHINGTON DC ROI (INTERIM)/19AUG04 (CONTAINS EXHIBITS (71) - (72)

(G) NCISFO WASHINGTON DC ROI (INTERIM)/200CT04 (CONTAINS EXHIBITS (73) - (81»

(H) NCISFO WASHINGTON DC ROI (INTERIM)/17DEC04 (CONTAINS EXHIBITS (82) - (89»

(I) NCISFO WASHINGTON DC ROI (INTERIM)/14FEB05 (CONTAINS EXHIBITS (90) - (100»

(J) NCISFO WASHINGTON DC ROI (INFO)/lOFEB04/I/OFFICE OF NAVAL RESEARCH, ARLINGTON, VA/ALLEGED SOLICITIATION AND RECEIPT OF A GRATUITY BY NAVY OFFICIALS IN HAWAII

CCN: 29JAN04-DCWA-0023-4HNA

ble.

EXHIBIT(S)
(101) IA: Results of Interview of 09Mar05 ... (Copy all
less IG DOD)
(102) IA: Results of Interview of ~OMar05 ... (Copy all
less IG DOD)
(103) IA: Results of Interview of 10Mar05 ... Copy all
less IG DOD)
(104) IA: Results of Interview of 07Apr05 ... (Copy all
less IG DOD) EXECUTIVE SUMMARY

1. This investigation was initiated based upon a Naval Inspector General (NAVINSGEN) inquiry for susgected adultery and travel issues

invol ving . • . - . i· . l Findings

from that investi~sulted in possible conflict of interest

matters involving"""'_'and GS-15 Civilian.

FOR Off'S' 0' ? II! ONLY Page 1

WARNING

TIi!S DOCUMENT IS THE PRoremy OfJtlE NAVAl.. CRIMINAL INYESDGAT!VE SERVS cotrniNTSMIIY BE DISCLOSED OM. Y re PERSCNSWIiOSI! OfFlCW. DUnES REQUIRE ACCESS HERE'Jl)-COH1ENTSIMY~BEDISClO$EDrolHEFWnYIS)CONCERNEDwmtOUTSI'EClFlC 10 l AtJ11j()RlZAllON FRa.llHE ..... V"'" CRIMIW.INVE:SJ'I(MTlVE SERlllCE

~~UU~U~-UCWA-0307-4GNA/~~

SUBJ: S/RESEARCH CORPl_~~ION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

."""'.Jj) .... ' .. "

\:'0,:;

Ih+A~'I I ( RCUH)

....... ,.and ........ planned to benefit from their NAVAIRSYSCOM affiliation by orchestrating the award of a proposed contract (N00421-02-D-3151) (also referred to PROJECT KAIE'E') to a company

........ and were developing (Pacific Research Institute

(PRI». Research for the proposed contract was being conducted by personnel of S/RCUH who were being funded by non-related Navy grants

which were administered by and who had fiduciary oversight of

the grant monies. Ultimately, proposed contract # 02-0-3151 was not awarded. The investigation did not develop evidence of a criminal

violation by concerning contract # 02-D-3151 and

conflict of interest issues, Reference (A) details.

2. Subsequent to the submission of Reference (A), the investigation continued with a focus on possible false claim issues concerning

three (3) S/RCUH staff personnel hired at the direction, IOlf;;;;~" working for NAVAIRSYSCOM Office of Navy Research (ONR),.

directed RCUH t the

hiring of . and

at salaries exceeding $100,000 per annum. Allegations are three (3) S/RCUH personnel were involved in proposal research and submissions for proposed contract award # 02-0-3151 (PROJECT KAIE'E).

However, S/RCUH records show that labor for the three (3) personnel

were charged against two (2) U.S. Navy grants. No bid and proposal

(8 & P) labor charges were noted in the S/RCUH records for these

personnel, Reference (8), Exhibit (58) Enclosures #12, #16, and #19 pertain. Further, records show that through the University of Hawaii (UOH), S/RCUH submitted claims for payment of labor and related travel costs for these three (3) personnel, as direct costs to the tW9 (2) u.s. Navy grants, Reference (8), Exhibit (58) Enclosure (20)

pertains. Numerous interviews have been conducted of pertinent I)'~-

parties to the inVestigation and reported out via References (B) - ~

(I), including contact with the U.S. Attorney's Office, District of

Hawaii, Honolulu, HI. This case has been transferred from Washington

DC to Hawaii for prosecutorial oversight and action. Additional

information is being compiled at the request of AUSA Michael

SEABRIGHT, Chief Criminal Prosecutor. Said tasking includes an audit

of RCUH employment records by the Defense Criminal Investigative

Service to determine actual monetary damage to the government. This

investigation currently focuses on the directed hire of"lI ..

_ and _by __ at RCUH and the use of Navy Grant money to pay their salaries for work related to PROJECT KAIE'E' vice the actual grants. Other possible fraudulent activities that develop as a result of this investigation will be captured under separate investigative efforts and reporting.

NARRATIVE

1. This case is a reactive investigation resulting from disclosures revealed via Reference (A). Possible suspected violations include 31 USC, Section 3729 (Civil False Claims Act), 18 USC 666 (Theft Concerning Programs Receiving Federal Funds), 18 USC Section 208 (Acts Affecting a Personal Financial Interest) and 1001 (False Statements) may also apply.

FOR~SEONLY PSI}fI2

WARNING

HERETO. COHIiNT8 tMy NOT BE DISClOSED TO 1JE PARTY(II) ClDHC£IINED wm«lUT 8I'ECIFlC

THIS pocUMENI IS 1l1E PBOf'ERlY Of ruE NAVAL CRIMINAL INVESTIGATIVE SEfOOCE OOHI'EHTS tMy BE DISCLOSED ONLY TO PERSCIHS IIIfI08I! OFFICIAl.. DUnes REQUlRE~

\O~

i&. ~uUl\1U4-U\";WA-UJU I-':IGNA/:"

SUBJ: S/RESEARCH CORP( ~-MON OF THE UNIVERSITY OF Ii, II (RCUH)

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

2. NcrSFO Hawaii received transfer of case control in MARD5. Since submdssion of Reference (I), interviews of key grant program

personnel, and have been

conducted and have corroborated suspicion that the employees who were directed hires by1lllllJwere not performing grant related work. It was established that the work being perfor.med was either unknown, or was related to PROJECT KAIE'E'. Exhibits (101) - (103) pertain.

3. was re-interviewed and confir.med he was a directed

hire at RCUH py and did work on PROJECT KAIE'E', but mail'!-tained 11:;, _W;;ts done in off-hours. Exhibit (104) refers. Additional iqterviews are underway to establish the veraci claim and as~ertain what grant work' was produced during

employment RCUH.

4. investigation' DeM.

to conducting additional witness interviews, the pending results of the audit being conducted by

DISTRIBUTION NCISHQ: 0023 INFO: DCWA

Commander, Office of Naval Research(M)

Office of the Inspector General

Attn: !

800 North Quincy street

Arlington, VA 22217-5660

Commander, Naval Air Systems Command(M)

Office of the Ins

AIR-OOG1 (Attn: /

47123 Buse Road Patuxent River, MD 20634

Inspector General, Department of Defense(M) Deputy Assistant Inspector General Investigative Policy and Oversight

ATTN: SA •••••• ~

400 Army Navy Drive, Suite 1037 Arlington, VA 22202-4704

/

FOR OFF'~~NLY

Page 3 ~_V2LNY

WARNING

THIS QOCUMENT IS WE PROPERTy OF mE NAVAL CRIMINAL INVESTJGAD\IE SERVICE CONTBfTSIMYBf; DISCLOSED Of«. Y TO PERSoNS VttIDSEOFFIC ...... IlUTIES REQUIRE ACCESS HERETO_1XIHTeITS MAY NOrSE DISCLOSED TO tHE PARlY(S)COHc::ERNEO WIIHOUT SPeCIfIC oWIHDRIZATION FROM tHEWoVAL CRlMIW.lN!IES1lG'ollYE SERVICE

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11:23/ / ·lJ.-llQ()'l'l ,,9

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

INVESTIGATIVE ACTION

09MAR05

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII/ HONOLULU, HI

RESULTS OF INTERVIEW OF ••

On 08Mar05, Reporting Agent met with Civilian,

Professor of Engineering, University of Hawaii (UH), at Verbano's Italiano Re~torante, Honolulu .. HI, for an arranged· interview pertaining to grant activities at the UH. _provided the following information:

........ stated that she is currently an at UH and

teach~s Optics in the Electrical Engineering Department. has

her PhD from Old Dominion University. She has been employed at ua

for approximately 4.5 years since AugOO. stated that she

recalls on her third day at UH she A few

months following this meeting, approached her about writing a

proposal for a Grant and told that she was with NAVAIR and

had money to fund summer salaries for research programs. ~ indicated that she was not interested in a summer salary since she had two months already to be paid by UH, but would want to employ some graduate students for research studies. ~rote an accepted proposal to perfo~ an optical Gommunications study for the Airship program; however, this proposal was never funded because program funds were not released. In MayOl, ........ was again

approached by to write another proposal on IRSD and other

optical sensors used in cooperative .. theater engagements. _ was

introduced to . by_ as a person who would

help prepare the proposal and who would be working on the grant. This proposal was submitted in JunOl and a grant was awarded for the Theatre Ballistic Missile Defense (rBMO) in JuiOl.

~was the first hire on the grant and was paid according to

guidelines given recruited three (3) graduate

students; and to work on grant

research. All graduate students were paid minimal salaries from the

grant". stated that she was the

on the grant. It was not the UESA grant and did not

have any UESA components. In SepOl,

directed two (2l additional hires, and

~, to the grant and requested that the current research scope be expanded to include UESA components. Because of differing engineering specialties involved (optic vs radar) ......... was not

familiar with the work conducted on the UESA grant. was not

involved in any Navy or RCUH contract work and was not an employee of RCUH. Her physical work location was The Optical Communications Lab at UH. 1IIIIIII'stated that she was the only PIon the TBMO grant and although she did not report to anyone person, she identified JIIIIIIIIIIIIIIs the granting officer at NAVAIR and the major

FOR Ot{'G'ftlr' JSE ONLY

Page 1 .

WARNING

1l1IS DOCUMENT IS THE PROPERTY OF me NAY&. CRIMINAL INYESIlGATlYE SER'IICE COHTENTSWlY BE DISClOSED OI«.Y TO PERSONSVtttOSe OfFICW. Dtm~S REQUlR~ACCESS

HERETO. CONI!NT8 "","YHOT BE OiSCLOSEDTO YHE PAAlY(S) CONCERtED WI1HOUI" SPECIfIC l 0,-\

IWIORIZATJa-I FROM YHE """VAl. CfI-.IlMiSTIQATlVUEIMCI!. EX H I B IT (101)

L. "2 v U!~ U ~ -uvwa-UJ U I-I;IGNA./ '1' ~I

SUBJ: S/RESEARCH CORP'-.\,.\{tION' OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

H(\I

, '

contracting correspondent. He was involved in modifications for the grant and obtained the DD254 for classification of certain grant information.

_ stated she frequently interacted with~ at NAVAIR. ~tated she was often uncomfo~tions by relating to the directed hires and would voice this with

7 . advised that for the purpose of the interview. she

was uncomfortable speaking on behalf of but was aware that

....... was directing him on issues pertaining to her grant, as he

would often convey messages to lit from

_related that at the time of the TBMD grant, she was

introduced to She and were suppose to work

together on Sensor Integration Testing. She was led to believe that

_was also a researcher like herself an ultimatety

hired him at the direction of He was hired as Senior

Researcher on the TBMD grant. was led to believe that she

~~would be working together as researchers on the project. ~~~ated that not long after the grant started, she learned that ••••• did hot have "researcher" qualifications, but was more qualified to do work as a program manager or as a grant administrator. However, it came to light that was not perfo~ng any work for the grants stated research objectives .

........ stated she is not clear what work actually performed.

but that it was an effort to initiate a different program seemingly

at the direction of actions were being directed by

She r~calls that had an enormous travel budget.

stated that toward the end of the first yeqr, wanted

••••• to fire told she was uncomfortable

, with that and did not undezatiand what was really going on, what he

was being used for, or what the purpose of the firing would be.

1~~~=.rle~1~a~t;ed that she came to believe only that did not

trust' at the time she wanted him fired because he was

traveling without approval from the NAVAIR group and was having meetings that were not "authorized". does not know the

nature of those meetings. The UH, at the direction of ended

up firing_ in DecOl. He had been hired in JulOl.

, With regard to the timecards, related that time sheets were

submitted electronically for everyone including

and She was under the belief that

were salary-type employees, there was not an option to change the amount of time they worked in a single week unless they took vacation. She was responsible for approving these time sheets and she stated she trusted that the program manager was providing direction to the directed hires in accordance with the goals and . objectives of the grant. They did not report their activities to

1I .... II~ther than vacation and sick leave and it was the same for

all employees on the grant. As stated earlier, raised her

concerns with who directed her to do as said.

project and subsequent to the termination of 11111111 ..

WARNING

nus DOCUMENT IS 'IJ:!E PROPERTf OF lltE NAVAl. CRIMINAllNVESDGATtYE SERVICE COHT!NTS IoIoroV lit: OISCt.OSED ON.Y TO PERSONS ~ 0FFlCW, IlUTIES REQUlIIE ACCESS HERETO. COHTENT8 MotoV NOT lit: DISClOSED TO 1IiE PARTY(S) CONcERt£!) WI1HOUT ~FIC

oWIHORlZAllOH FROM 1IiE NAIfA1. CRIMrW. ~1lVE SERVICE.

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SUBJ: S/RESEARCH CORR0.fTION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

1I1I .. II_received calls and emails from regarding her

direction to hire two (2) additional employees from ONR.

stated she was not comfortable and any new hires affected the already low pay of her graduate students who were earning only about $17,000 year. Prior to_ firing, had threatened to take away

her grant funding if it came to the point that was not

terminated. and were hired at

••••• direction as temporary hires of the grant

who would be removed soon. As time continued and the grant's funds became depleted, directed to submit a proposal amendment requesting additional funds to cover the new hires,

........ wetS !ncorporated- into the grant tOintt9grate aspects of the UESA radar into the theatre engagement study, as directed by

tI .... II~·dentifled as an Admdnistrative Assistant,

not a technical hire. Together, , an

salary constituted more that ~ of the grant money. related

that she had to revise the budget a lot in order to accommodate their

salaries and spendings. . 'was adamant in that she never was

clear what either orl actually did. Both lived on

Kauai and worked at PMRF never saw them.

The grant was subsequently provided another $100,000.00 (US) in 2002, as a result of an additional modification and to'keep everyone

working incl and stated it was to

"finish up the stated she was allowed to spend

$20,000.00 (US) of the money on grad stUdents and -supplies. At that

point id not want to be involved in it anymore but

officially finished the research in May03 then continued in the same line of research in her lab without additional funds since the group maintained interest in the optical sensors being built.

stated the grant cost a total of approximately $650,000.00 (US).

c.., bT

At the completion of the grant, repeatedly asked for the

documentation from so that she could account for the grant

money being spent. would tell her that he would provide

some reports, but he never did. stated she withheld from

filing a final report for-the grant because she was unable to justify

the spending due to lack of documentation froml~""I;!!~~~~~:

and She repeated she never did know what role

was, but only knew when she was taking leave or vacation.

stated she spoke to about her concerns on several oC9asions

and related to him that the money was running out. Eventually,

",,"and were no longer paid by the grant because the

TBMD money was being depleted and everyone would have been terminated had they not been removed from the grant. An alternative was for

....... to increase the funds, but -did not find that to be a

good option. she is not sure how much and made

after leaving her grant, but stated she thinks they were removed in early 2003.

With regard to confirmed that she knows ........

but was never asked to hire him. He did not work on her grant, but was working on a different grant, probably the UESA grant. She

FOR QlI_.d.i"~(JSE ONLY Page 3

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24JUN02-DCWA-0307-4GNA/'" .)

SUBJ: S/RESEARCH CORPLATION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

related that would not have been qualified to work-on a

university grant as a researcher; however, he was ultimately hired under a different grant at the university under direction ofllllll~

She related that worked for and eventually

moved to Kauai. She does not performed but is

aware that at one point was making travel arrangements for

""IIII.related that the RCUH and grant hiring process seemed odd.

She expected that as PI to the grant, she would review resumes and applicant qualifications and would find suitable candidates.

found the directed hires questionable but does not believe RCUH violated any legal hiring practices.

1I11 ..... advised that there were so many different questionable

aspects about the interactions with NAVAIR :. and the grant

programs. She told repeatedly of actions, which made her

uncomfortable. Specifically, she pointed out the "directed hires" as they did not appear to.be working on her research efforts on the

grant. - stated she spoke witH about her misgivings

and was told that the directed hires did work for her and were

intended to help her grant research activities. stated she

spoke wi regarding her concerns over the direct

hires toward the end of her grant tenure and when the grant was running out of money. She related that if the money ran out, the grant would have been automatically terminated and her graduate students would loose their tuition waivers in addition to their salaries.~responded by moving the two directed hires off.

the TBMO grant and on to another RCUH account. related that

she did not understand ......... obvious power over the RCUH staff and others at the university, but people seemed to go out of their way to accommodate her demands.

Reporting Agent

if she had any direct knowledge of or ......... (or any others) being paid by grant money to work on Project Kaie'e or non-grant projects.

tated she did not know what projects any of them actually

worked 6n, only thlaa~tllll;:~;was directing them. ........stated that

she did hear from I that non-grant related work was being

conducted in off-hours. She added that claimed to be

working on other projects for n nights and weekends. IIIIIIIIIJ

stated she has no information or evidence that Project Kaie'e work

was being performed on grant time. had no direct knowledge

of Project Kaie'e, but had heard that if the contract were awarded it would have been worth an extraordinary amount of money.

BIOGRAPHICAL DATA EMPLOYMENT:

SSN:

DOB:

UNIVERSITY OF HAWAII

REPORTED OFFICE:

SPECIAL AGENT HARBOR

WARNING

IHIS DOCUMENT IS THE PROPERlY OF JtjE NAI{A!. CRIMINAL INVEST!GADYE seRVICE OONmIlSMAYBEIlISCLOSED~YTOPER&CNSWHOSI!OfFICW.DUnESREQUlREACcEas HERETO. COIofTENfS MAY NOT BE DlSCLOSI!O TO '!HE PARTY(S) CCJHCelIHEDWITHOUf Sl'ECIFIC NJIHORlZAlIOIoI FROM 'IHE NIlVAL CRIIoIIW. INVESTIQA'IIIIE SERVICE'.

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U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(@

-'

INVESTIGATIVE ACTION

10MAR05

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII/ HONOLULU, HI

RESULTS OF INTERVIEW OF _

On 09Mar05, Reporting Agent met with •••

........ North Star Scientific Corporation Th~ ~eeting was

to obtain in£ormation from oncerning his prior work on UESA

contracts/grants with RCUH, while he was a NAVAIR employee and facts

concerning handling of grant money •

. As background, ...... related that he was employed as a Government NAVAIR engineer ~ 1989 to 2003. _last assignment with NAVAIR was the Pacific Missile Range Facility (PMRF) project, doing

radar analysis with The tasking was to design a

transmit/receive switch for the E2C Hawkeye. The project was funded by government project funds. He was physically assigned to working on Kauai. elated that this project evolved into the UHF Electronically Scanned Array (UESA) program ....... related the University of Hawaii (UH) was working collaboratively with NAVAIR on the program. The technical name of the program was the "CEC Antenna

Miniaturization/UESA Switch Module Development." role was to

design and build the transmit/receive sub-system, which would be delivered to Northrup Grummun, to be installed on an Oahu mountaintop. _ stated -. administered the funds for the UESA program.

~tated that it was these funds that ~ used to pay _ He confirmed that"" was. a directed h~ to RCUH via.

At the time, was the Principal

Investigator (PI) for the UESA grant, but quit and went to work in ~~~

the private sector ................ became the next PI for the ~

grant. identi~an engineer on the grant and

recalled that every fe~ months..... and~ (NFl)

would come to Oahu and change the statement of work and i~d end product of the grant. New statements of work would be drafted, but nothing would ever happen. He described the UESA grant as having focus but had an ever-changing scope of work. ~stated that, he did not control any of the grant funds it was~or ~ """was asked to identify all the personnel ~worked on the

grant. He stated it was himself, who was in Oahu, three

(3) people from a company called Oceanit, who he believed were subcontracted and a few grad students (NFl). ~stated that when

~ was hired, he had no idea what he was hired to do and also stated that to the best of his knowledge, ....... never worked on the grant. ~tated that at the time, he had no idea how ........ was getting pad.d , Furthermore, _ title kept changing, .uaua Ll y due to ~justifying his role ......... first lived on Oahu while working for RCUH on the UESA grant, but after the initial lG

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t08 EXHIBIT (Iat)

HERETO. COIfI'&«S NAY NOT lIE OIaCI.OS~ 10 TlE PAJm'(S) cct«:ERNEIl WI1HOUT SPECIfIC AUIHORIVo1lQN FROM lHI! ,..,VAI. CIIIMNt.!- INVt:mo.t.TMi sawlCE.

'!'~VUl~U'::-lJCWA-U::W·I-4GNP I~

SUBJ: S/RESEARCH CORPC~~ION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

~ \4 Ie .arr

investi moved him to Kauai. stated that he

feels ropedllllllt into the position. He related

that "directed his every breath." related that the more

money was in charge of, the more out of control, she became.

She was of $70 - $100 million dollars (US) and

administered it "based on her emotions and who kissed her butt." """stated that ....... was very controlling and there would be

repercussions for disloyalty. was offered as an example

as __ fired q~ shortly after he had been hired as an RCUH

employee. . confirmed that ........ was hired as an RCUH employee

to work on the UESA grant, but it was clear he did no work on it at all.

~attempted to explain activities of regarding.the

development of PRIor Project Kaie'e'. He explained it as her attempt to develop the company as a program "element" of UESA that would get money every year and would give her (and _ control over the people working for them. ~stated that it was evident they were trying to establish the company, primarily when he and ~were brought on trips to Japan under the pretext of boarding ships to determine placement of the antennas. On one trip in particular _and _'were taken from the legitimate "fact

finding" mission and brought into meetings wit~ and

......... to help build the framework for developing PRI. ,stated they spent 3-4 days of government time working private project. The trip occurred in December 1991. that attempting to establish networking in Japan was for her involvement with a company called solypsis.

__ opined that did most of ~irty work

beIteving his pay~the developrn~I. He also related that used ........... because of his ties to Senator Inouye. Ultimately PRI never came into existence, but~

developed PICTR/HTDV, which seems to be a backup plan to the failed b;lC' PRI. ~ related that PICTR gets money from government, plus-up. funds and then hands out work via Broad Agency Announcements (BAA).

~stated that .......... has no qualifications for any·of that work and the company is an unnecessary middleman getting a cut of the government money.

Regarding his employment with RCUH, ~came to RCUH in Mar03,

hired by and ..-. and ealized their

capabilities as engineers and the product and service they could

provide to the Navy. The intent was to start NSS. and ........

entered into an employment agreement to work with RCUH on the HEATX program with the option to spin-off NSS within a year. was upset with their employment with RCUH and_ explained that she

had trJed to convince them to come over under a BAA withllllllllill Due to legal restri~tions, the BAA would not have allowed them to do the work they wanted with NSS and they said no to her offer.

added that any good working relationship with Iwas long over by

then.

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SUBJ: ·S/RESEARCH CORL':~ON OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

No other pertinent information relevant to this investigation was disclosed.

BIOGRAPHICAL DATA

EMPLOYMENT: ASSOCIATE PROFESSOR, UNIVERSITY OF HAWAII SSN:

DOB:

REPORTED BY: SPECIAL AGENT

OFFICE: NCISFO PEARL HARBOR

FOR OFF~E ONLY

Page 3 LAST'" V2lNY

WARNING

THIS OOCUMENT IS THE f>ROPEIID OfIHE NAVAL CRIMINAL iNYESJ!GAD'iE SERVICE COHTI:NllI MAY II! DISCLOSED ONLY TO Pl!llSONS IMIOSE OfFICW.IlUJIE. REQUIRE IICCES8 HERETO. CONI1!NTS MAY NOT BE DISCLOSED TO 11£ PAR1Y(S) CQIoICfRNal Y1ImiOUT 5PEC1F1C

AUTHORIZATION FROM11£ NAVAl. CRNlW.IHJE8T1WIlIIIE SERVIC!.

llP

01'b/le1;;;

/ I 'L?;J/ I .JJ- Hq tlq -~:J

u.s. NAVAL CRIMINAL INVESTIGATIVE SERVICE

~\

"~I

\" .; . .,

INVESTIGATIVE ACTION

lOMAR05

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII/ HONOLULU, HI

RESULTS OF INTERVIEW OF

On 09Mar05, North Star

Scientific Corpora , was interviewed by Reporting Agent. IIIIIIIIa

was interviewed_ concerning his knowledge of the adininistratio~

funds on Navy grants under the control of

As background information, --I" stated he worked as an engineer for NAVAIR, assigneq to the UHF Electronically Scanned Array (UESA) grant to build a transmit/receive switch. His entire government service was spent on Oahu and he worked at the University of Hawaii

(UH) • tified other people involved in the project as

fonner Principal Investigator (PI), .. 1111111111

PI, engineer, and three (3) individuals from Oceanit, a

subcontractor. ~AVAIR s rvisor was ~but_

was directed by~a-ndl had to' fight them

::n=~:~t~~enna Ml!la~~~~!~~=n~~:~Ah;w:~~:e~O~:l:h~e~:~~!~:~~"kn~:n

identified himself as the technical lead but cognizance of the grant had to be a UH professor or the PI. The PI administered grant needs and issues including payroll. ~stated that his role was to prototype and start building the product. He related that he also tracked the budget and made decisions on purchases.

identified other people involved in the grant project as three (3) employees from Oceanit and some graduate students .

•••• - confirmed that was a direct hire by'_ He

related that at a trip to Japan when he and were there for

grant related tasking, they were pulled into meetings with_ and ~about developing PRI. It was clear that PRI was going to be run by _ and __ During one of the meetings, _ and

......... pulled ......... into a side room and discussed salary with ~bring him on as an RCUH employee. _was told to hire ~

him and he was pald by the grant. _advised that he had no -t_~

- idea what _did in his job. He was always changing his title ~ T<'-'

and no qualifications. According to ......... the idea to bring him

on to work on the grant was just "some bullshit excuse" to hire him.

He was a naval mine expert of some kind with no connection to the

project. He never collaborated on the grant and he was at .........

beck and call. He did a lot of travel and worked closely in the

............... inner-circle.stated that at one time ~

~rnself as the T/R Switch Program Manager. IF

stated~knew nothing about the T/R switch and they ended up getting Lnt;o a fight over the matter. _ stated he knows that ........ was working on thePRI/Project Kaie'e' issue because another

~e had given himself was the Kaie'e' Program Manager. _ IF

FOR OFjlllllfuSE ONLY Page 1

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Jl1IS DOCUMENT ISTl1E PROI'ERJ'f Of rue NAVAL CRIMINAL INVEST!GAJIYE SERYICE

CONTENTS ~Y lie DISCLOSED OM. YTO PEIISQNS _ OFFICIAl. DUllES REOUIREACCESS HERETO. CON7BII'S MAY NOT BE DlSCLoseD TO 1HE PNm'(S} CONCERNED v.mtOtIT Sl'l:CtFIC

t t t

EXHIBIT «(03)

... -.: u VL~ UL.. - U\.,VVl\-U':s U1 -4GNA/T

SUBJ: S/RESEARGH CORh+lTION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

stated this put in a very bad spot because he was suppose to

be in charge of and Kaie'e' had not even been developed.

,==rwas signing off as that and doing other things that left

I in a bad spot, including the reviewing of resume for

a position with PRI. stated that ~'was pissed."

According to did, and probably still does have

undying devotion to nd _

~related that he did not collaborate or get involved in

Project Kaie'e' although and were always trying to

pull him off into side tasking. stated he would get very

irritated because he was workipg very hard on the T/R Switch program and was obsessed with it and didn't want to be taken away from his work. He said he was aware of Project Kaie'e' from the sidelines.

~====ltstated that he was hired at RCUHafter being recruited by

• Following his hiring at RCUH, became very

antagonistic. opined that the control of so much money by

...... ~made her impossible. She used the money to control other people. tlllllltalso related that the development of PICHTR by

IIIIIIIIIIIlwas an incarnation of Project Kaie'e'. was under a

~essure to hire people at direction. Many of those

people now work for PICTR.

No other information relevant to this investigation was obtained.

BIOGRAPHICAL DATA

EMPLOYMENT:

t(:ORPORATION SSN:

DOB:

PO~:

REPORTED BY: ~PECIAL AGENT

OFFICE: NCISFO PEARL HARBOR

NORTH STAR SCIENTIFIC

WARNING

J!:lJ§ DOCUMENT rSfflE pROPERJ)' OF THE NA'IAI. CRIMINAL INVESlJGADYE SERVICE eotmM"lI INIY BE DlSCLosaJ OM.Y TO PERSONS IM!OSI:OFI'ICIAI. DIITlES RE<IUIR~ ACCESS

HEIIETO. CONTI:HT5 INIY M)T BE Dl6Ct.OSEtl TO 1H!: PARTY(S) CONC:EM£D wmtoUr SPECIFIC NJIHOfIlUollOH FROM1HE ~VAl CR_ rM:SIlIMTNE SERIIlC£.

_Y) I~.Q t,(,. 'i"

J I " .. ··;1

,.i:t I ' ::J2;;/

\~

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

,,- .... ~ <:» J r

1/23/~/;*1/

INVESTIGATIVE ACTION

07APROS

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)!

HONOLULU, HI

RESULTS OF INTERVIEW OF

On OGAprOS, Reporting Agent (RA) interviewed· at his

workplace, NorthStar Scientific Corporation, Campbell Industrial Park, Kapolei, HI ............ was interviewed in reference to work

he performed while employed with RCUH in the 2001 time period. confirmed he had been interviewed by SA IIIIIIIIIIIII in February 2003 and was informed that the investigati~

additional information. In addition to the information provided to SA ........ ~provided the following details .

. ~as asked specifically what job he performed at PMRF (Pacific ~ssile Range Facility), Kauai as a RCUH employee.

stated that he was hired to support the UESA (UHF Electronically Scanned Arra contract and worked for ........

~at PMRF. added that he was aware of the line of

questioning as; he had een approached approximately seven times by the RCUH security officer, ~ who questioned what work he performed, and alleged that he had been working on non-grant projects

during normal working hours, at the direction of $

stated that he repeatedly informed that t~e work he

was doing for was performed evenings and weekends and that

work time PAID by the grant was work FOR the grant.

stated he was salaried, so there were no overtime issues pay b1C

and the forty hours a week charged to the grant each payday was

actually grant related work. confirmed that ........

directed his hiring via confirmed that

........ ~II ... was the PI (Principal Investigator) for the grant but stated that he never saw her. He was hired under the grant and was aware that all his time was charged to the grant as instructed by

,......... but related that it was three months before he was told that~was the PI for the grant. He stated that when he was

hired under particular grant, (which he never read); he was told

by simply, that the grant had UESA components and he

or and not for did

technical support was program manager.

Specifically, his job was sure that Northrup Grummun was

doing what they were suppose be doing.

aware that

directed his

When asked about the work he stated that all the work was

FOR~EONLY Page 1

performed on Project Kaie'e', done after hours and weekends.

WARNING

THIS DOCUMENT IS me P60pemy OF WE NAVAl cRIMm INVESDGADyE SERVICE CCIHTENTS MAY BE DISClOSlm ON!. Y TO PERSONS WHOsE OFI'ICIAlIlUTlU RI:QUIRE ACCE:SS

\ \3 EXHIBIT (tOf>

HERETO. CONTEN'IlI MAY NOT BE Dlsct.OSED TO TIE PAIITY(S) IXIHCE-'> W!lHOUT Sl'£CtFIC

_____ • __ 6.iI_11"'~ U..,IV J--~Ul"r1/'~'

~\

SUBJ: S/RESEARCH CORl. ,,~.ga.ION OF THE UNIVERSITY OF

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

~

I4,\':{~II (RCUH)

stated he spent about 30 hours a week on the project and was always at his house after hours and weekends also working very hard on developing the proposal for Project Kaie'e'. He

stated that very diligent'ly promoted the project. When asked

if he was compensated in any way for his work, stated that he was not. He related that had pitched the project to him as something that would be good for Hawaii and benefit students and compared it to the MIT Lincoln Center proj ect . thought it would be a beneficial project for the community, but says now that he was sold a bill of goods and realized ....... had her own agenda.

"111111"" stated that wrote the E2C Hawkeye part of .the

proposal and it was tailored to a company that she was- developing

with stated he wrote about 50% of the proposal.

structuring the organization she repeatedly talked

about qualifications and continually

the person to run the program. recalled

that and ook to Korea. They returned

job for the company president that would get the

Project Kaie'e' contract and a resume for and asked

1IIIIIIIIIIIt0 rate them. On a scale of one to five, ~all fives and one four (stating he didn't think

qualified, but was pressured to give what she wanted.)

......... came to for the results and when he saw the

"four" rating, he stormed out. Five minutes later _called

upset about the rating. _ also related that would put out Broad Agency Announcements (~'s) for projects

that companies could bid on and and ........... were asked

to rate them. They would rate several companies and without .

reviewing any details,~would go through the list and eliminate any company that did not have some personal connection to people who were in her circle or with whom she had a personal relationship.

~gave additional details that his prior work history ~ years with GTE as a senior member of the technical staff. , whom he met while living in the Marshall Islands

recruited him to RCUH. The hiring was about a three-month process .

........... confirmed again that Project Kaie'e' was done after hours with _at his home. He stated it got old. When asked about logs or notes regarding the.work, he indicated he did not have any but had given SA ....... emails with unusual content that he had been copied on from ot~yers in the project including ............. When asked why he committed so much of his time to the~en he was growing tired of all the work, ~stated that ........ was very manipulative. She was always at his house, worked all the time, and then would discuss how the grant money was getting low and

FO~SEONLY Page ,.....------

WARNING

THIS DOCUMENT IS mE f>RQpERTY OF THE NAVAL CRlMlNAlINV€SDGAJIYE SERVICE CONT9ITS PoIOIoY BE DlIiCI.08ED ~ Y TO PERsa.s Vvt40SE OfFICIAl. IltITlES RE<lUIRI; ~ss

HEIIErO. COIfTENrS PoIOIoY NOT 81; DISCLOBal TO '!HI! PARlY(S) CQHC£RNEO WI1I«M' SPECIfIC

SUBJ: S/RESEARCH COR~,"~ION OF THE UNIVERSITY OF k",r~I (RCUH)

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

people would not be paid. "No funding, no job." Just when the grant

money was about to run out, would "save the day" and get more

funds causing people to feel grateful to her. She had many ways of

manipulating people to do what _she wanted. outlined

incidents wherein if people did not qo what wanted she would

work to not only cost them their jobs, but also viciously try to ruin their lives.

1IIIIIIIIItconfinned that towards the end of the grant, did ask him for reports concerning his work. ...........stated that he

had prepared the reports but prior to ng them, the hard drives

from RCUH personnel were seized. ' stated the report

requested by'-:iS still on the hard drive, which was never returned, but he cannot recall the name of the file. When asked to confirm any persons who could verify that the work he performed during normal work~ng hours at PMRF was actually grant related and

not Project Kaie'e' matters, provided the name of

~and He added that

could also verify that he was working on Project Kaie'e'

after hours. ._, added that was not liked by

that she was with on many ects including Kaie'e'

and was aware of the BAA manip~lations. identified

himself as her technical advisor. In related an incident wherein 57 E

outside the office and specifi told him that the BAA's were

for.med for companies like his son and that his son's

company should get the business. was asked to clarify a

statement made ~n his interview with when he stated that

stated, "You were the only person that wrote the proposal".

stated that intent was for _ to take

full responsibility for wiiting the Kaie'e' proposal and not identify any other participants if asked.

~ asked t job. He related that

~was personal secretary. He did not know

specifically what she did. He also stated ,that prior to working at

PMRF,~was let go from Lincoln Labs and "fixed it" so

he would get picked up by PMRF.

REPORTED BY: SPECIAL AGENT

OFFICE: NCISFO PEARL HARBOR, HI

FOR alii •• ' ••• USE ONLY

Page 3 LAST -. V2 LNY

WARNING

mlS DOCUMENT IS me PROPERlY Of reE NAVAl CRIMI!W.ItftES!lOADVE SERVICE CONreNTS MAY BE DlSC~OSI!D ON!. Y TO P£RSONS OMIOSI! ~ IlUIIE'S REClVIRE ACCI!S8

'\\S

986796 12: 08 20050520 I' '.~·"EMArL #9194 OUT: DCWAEXLIF.

"

.'10;734

'.\~.

, .. !

u.s. NAVAL CRIMINAL INVESTIGATIVE SERVICE

REPORT OF INVESTIGATION (SUPP)

20MAY05

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAIRSYSCOM/00019

MADE AT/DCWA/WASHINGTON DC

SPECIAL AGENT

REFERENCE

(A) NCISFO WASHINGTON, DC ROI (INTERIM)/14FEB05

EXHIBIT{S)

(101) Supplemental FINCEN Intelligence Report/25APR05

NARRATIVE

1. Subsequent to the .transfer of REF (A), a FINCEN Intelligence Report dated 2SAPR05 arrived at NCISFO Washington, DC. This supplemental FINCEN report is being forwarded for inclusion with case file.

ACTION

HIHN ... Exhibit 101 is forwarded for case file, REF (A) pertains.

DISTRIBUTION NCISHQ: 0023 ACTION: HIHN (M)

INFO: DCWA

FOR 0fIIIIIIIIt_ USE ONLY

Page 1 LAST" V2 LNY

WARNING

THIS DOCUMENT IS THE PROPERTY OF THE NAVAL CRIMINAL INVESTIGATIVE SERVICE

CONUNTS MAY BE DISCLOSED ONLY TO Pf~SONS WHOSE OFFICIAL OUTIES HEClJlRf ACCESS HfRHO. CONTENTS MAV NOT BE DISCLOSED TO THE PARTY IS) CONCERNED WITHOUT SPECIFIC AUTHORIZATION FROM THE NAVAL CRIMINAL INVESTIGATIVE SERVICE.

l \lo

'"

_jlfJ

NAVAL CRIMINAL INVESTIGATIVE SERVICE

DELETED PAGE INFORMATION SHEET

Page(s) __ ----Il~\~]=i.--~-~\ 8~O'----------~-...,..,._-

withheld entirely at this location. One or more of the following explain this

decision: .

Deleted under exemption(s) _

Z Documents originated with other government agency(ies).

Referred for review and direct response to you.

___ Pages contain information furnished by other government agency(ies). We will advise you of releasability ofinfonnation following consultation with agency(ies).

OQIM- \=-ol e

P, 0 - Box "309

.--.-.- .. ---------.~--~- .. - .. - ... -------.

980519 13:32 20050513 IN(dLIL #7534 OUT:CIS #498C""~)

REPORT OP INVES~IGATION (ACTION) GENERAL PROCUREMENT (II)

13MAY05 CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAIRSYSCOM/00019

MADE AT/GCCA/CRANE IN REFERENCE (S)

(A) NCISPO HAWAII ROI (ACTION)/18APR05 (B) NCISRA MEMPHIS ROI (ACTION)/09MAY05

NARRATIVE

1. Reference (A) was re-directed by GCMT per Reference {B} to GCCA. GCCA acknowledges receipt of Reference (A).

., SPECIAL AGENT

DISTRIBUTION NCISHQ: 0023A

INFO: GCPF/HIHN/GCMT

FOR OFP~ USE ONLY

PAGE ~T _ V2 LNN

NNNN

\8\

977172 13 :52 20050510 IN:(.;:;J1MAIL #6442 OUT:CIS #487&'~)

REPORT OF INVESTIGATION (ACTION) GENERAL PROCUREMENT (II)

09MAYOS CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/

HONOLULU, HI

COMMAND/NAVAIRS'YSCOM/00019

MADE AT/GCMT/MEMPHIS TN_ SPECIAL AGENT REFERENCE__ - -- - - - ----

CAl HIHN ROI/18APROS

NARRATIVE

1. Reference (Al was received at GCMT on 09May05, less exhibits. Lead coverage not scaped. Forwarded to GCCA for action.

ACTION

R. GCCA: Scope the lead described in reference {Al. R. HIHN: Provide GCCA with exhibits to reference CAl.

DISTRIBUTION NCISHQ: 0023A

INFO: HIHN/GCPF/GCCA

FOR OFF~SE ONLY

pAGE ~ST _ V2 LNY

NNNN

,,"'.:;,/ r r I J"I '"

5108;)'849 MM

( __

u.s. NAVAL CRIMINAL INVESTIGATIVE SERVICE

REPORT OF INVESTIGATION (ACTION)

18APROS

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02'-DCWA- 0 3 0 7- 4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAIRSYSCOM/00019

MADE AT/HIHN/NCISFO PEARL HARBOR HI~ SPECIAL AGENT

EXHIBIT(S)

(1) IA: Results of Interview ofll .... IIII .. ~09MaroS ... (Copy GCMT only) (2) IA: Results of Interview (3) IA: Results of Interview 0 only)

(4) IA: Results of Interview only) (5) Interview Questions and Guideline ... (Copy GCMT only)

os ... (Copy GCMT only) OMarOS ... (Copy GCMT

7AprOS ... (Copy GCMT

NARRATIVE

1. Investigation pertains to allegations of false claims in~

_and several S/RCUH employees under the direction of........,

, Civilian, GS-13, Contract Administrator for Naval Air Systems Command (NAVAIRSYSCOM). Currently, one aspect of the investigation

focuses on in direct RCUH to hire three research

personnel, and to work on

Navy Grants lving either the Theatre Ba.ll ic Missile Defense

(TBMD) program or the UHF Electronically Scanned Array (UESA) !;;tCprogram. Certain components of both programs were conducted at the

Pacific Missile Range Facility (PMRF), Kauai, while others were

performed at RCUH, located at the University of Hawaii, Oahu.

ongoing investigative inquiry revealed that the three directed hires tllt_', _ were in fact being paid by the

respective grants; however, was not performing grant related work. Rather, the three individuals were conducting research for a proposed

contract (project Kaiete) which would ultimat personal

gain for (with whom

~was romantically involved) and other possible government and/or RCUH employees. Ultimately, the project Kaie'e contract was never awarded and conflict of interest charges were not pursued. There was, however, a monetary loss to the government currently being determined by the Defense Contract Audit Agency (DCAA).

2. Numerous interviews have been conducted with regard to actual

work performed by and _ _ has

admitted that he was an RCUH ~directed hire~ byllllllt~was paid by Navy Grant funds on a project he did not work. tIIIIIIIIIa has been interviewed and related that he worked extensive hours on

ect Kaiete for ....... but only during evening and weekend hours. ted that his role in working on the TBMD Navy Grant was to oversee the performance of Northrup Grumman production and as the

technical advisor When asked who could verify

FOR OF~SE ONLY Page 1

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24JUN02-DCWA-0307-4GNA/~, 'f,)

SUBJ: S/RESEARCH CORP~~TIO~ OF THE UNIVERSITY OF ~~:Il ~) U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

his normal working hours were spent working on TBMD or VESA grant

related projects, provided several names including •••

~and currently employed at NSWC Crane, IN.

3. has declined to be interviewed or to cooperate with this

investigation at any lev~l.

ACTION

R.GCMT: Coordinate and conduct interviews WW:i~t~h.'==IIII~~ and I

Conduct interviews with regard to

their ,. edge of the TBMD and UESA 'grant work a~ PMRP by

all involved parties, includin an,dd ........

EXhibits (1-4) provide background detail. Exhibit '(5) is a list of relevant questions instrumental to the case. For additional background information, contact SA at (808) 474-1218 ext ~ Report results of interview in IA format.

DISTRIBUTION NCISHQ: 0023A ACTION: GCMT (M) INFO: GCPP

FOROFji Page 2

ildrEONLY

LAST _V2lNN

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THIS DOCUMENT IS THE PROPERTY OF THE NAVAl. CRIMINA!.. INVESIIQADYe SERVice CONTENTS ..... Y III OISCI.OSID ON. 'I TO PliiflSONS WHOSE OFI'ICIALDUT1ES f1EQUIN! H:CESS

HERETO. CONTENTS MAYNOr III OISCI.08ED TO Ttl£PAllTYl8)CONCEIUoIEO WlTHOVT SPliiCI'1C \ ~) I L. -- ............. Y'II'\U RIH\U TN': NAVAL CRIMINAL INVESTIGATIVE SERVfOE. ,

c

959398 16:14 20050419 IN:SSDEMAIL #864 OUT:HIHNEXLIFE #8324

REPORT OF INVESTIGATION (ACTION)

18APR05

GENERAL PROCUREMENT (II)

CONTROL:. 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAL AIR SYSTEMS COMMAND/00019

MADE AT/DCWA/WASHINGTON DC , SPECIAL AGENT

REFERENCE(S)

(A) HlaN ROI (ACTION) /OSAPR05

NARRATIVE

1. Pursuant to the tasking set forth in Reference (A), evidence received from NAVAIR 10 was forwarded via registered mail to the NCISFO Hawaii consolidated evidence facility. Registered tracking number of mail is RR46017944US.

2. This completes lead tasking set forth in Reference (A).

DISTRIBUTION

NCISHQ: 0023A

INFO: DCWA!DCPX/HIHN

u.s. NAVAL CRIMINAL INVESTIGATIVE SERVICE

REPORT OF INVESTIGATION (ACTION)

OSAPROS

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAIRSYSCOM/00019

MADE AT/HIHN/NCISFO PEARL HARBOR HliI ......... , SPECIAL AGENT

NARRATIVE

L Receilt·lnformation revealed that Office of NAVAIR Inspector General transferred evidence (classified CPU's) pertaining to captioned investigation to NCISRA Patuxent River (DCPX). For cohesive retention of all case related materials, request DCPX transfer custody of CPU's to HIHN. Due to pending receipt of all transferred original case documents from DCNA, evidence Log numbers are unknown.

ACTION

R.DCPX: Request transfer of evidence received from NAVAIR IG and pertaining to captioned CCN be forwarded to NCISFO Hawaii consolidated evidence facility.

DISTRIBUTION NCISHQ: 0023A ACTION: DCPX INFO: DCNA

FOROFU Page 1

P t£6sEONLY

lAST .. V2LNN

WARNING

THIS DOCUMENT IS THE PROPERTY OF TtiE NAVAL CRIMINAL INlIESTlGATIVE SEB\lICE CONTENTS MAV BE IlISCI.OSED ONLV TO PERSONS WIfOSI; OfFICIAl. ourlES REQUIRE ACCESS HERETO. CONnPiTS MAV NOT BEOISCLOSEO TO THE PARTV(S)COHCERHEO WITHOUT SPECIFIC

·j

//231 Wltt/ 5Ct;11462/V1~ 3/30/0S

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

REPORT OF INVESTIGATION (ACTION)

28MAR05

GENERAL PROCUREMENT (II)

CONTROL: 24JUN02-DCWA-0307-4GNA/T

S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ HONOLULU, HI

COMMAND/NAVAIRSYSCOM/00019

MADE AT/HIEN/PEARL HARBOR HI 1t

SPECIAL AGENT

REFERENc;E (s.> .

(A) NCISFO Washington DC ROI (INTERIM)/14Feb05

NARRATIVE

1. NCISFQ Hawaii is in receipt of Ref (A), which transferred case control from NCISFO Washington DC. Receipt of all related documents pertaining to the case file is pending.

ACTION

DIST: Case control assumed by HIEN.

DISTRIBUTION NCISHQ: 0023A INFO: DCNA

. t~ .

FOR OF~E ONLY

Page 1 LAST _ V2 LNY

WARNING

THIS DOCUMENT IS 111E PROPERTY OF WE NAVAl CRIMINAL INVESTIGATIVE SERYI CONnIffilIMY BE OISClOSEOOM.Y TO PliRSONS WHOSE Of"1C1AI. DUTIES REQUIRE AC¢I;S8 HERETO. CONT!HTS IMY NOT BE DiSClOSED TO THe PARTYISI COfICERNI!D WllHOUT SPECifIC AUTHOIIIZATION FROM THI! NAVAl. CRIMINAl.INVI!STIGATIVI! !U!IW"'J

, 887663 20: 01 20050218 I~/1DEMAIL #50231 OUT:CIS #2t.:-),~

REPORT OF INVESTIGATION (ACTION) GENERAL PROCUREMENT (I I)

17FEB05

CONTROL: 24JUN02-DCWA-0307-4GNA

I/NAVAIRSYSCOM, PATUXENT RIVER, MD/POSSIBLE PROCUREMENT IRREGULARITIES WIm THE DEVELOPMENT OF HTB MODULAR COMMAND CENTER (MCC)

COMMAND/NAVAIRSYSCOM/00019

MADE AT/HIHN/NCISFO PEARL HARBOR HI_ •••• , SPECIAL AGENT REFERENCB(Sr·

(A) HIHN ROI (ACTION)/07JAN05

NARRATIVE

1. Since submission of Ref (A), RCUH documents requested via subpoena were received. Complete copies were provided to DCAA for continuation of audit. Originals are maintained at HIHN due to impending transfer of case control. Lead action is complete.

DISTRIBUTION NCISHQ: 0023A INFO: DCWA

FOR OFF~ USE ONLY

PAGE ~LAST V2 LNN

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.\8~

• .~ ... .i. ..... ~ ... ..-J.l. L.LJ 1t.L ..J J .1 :J

REPORT·OF INVESTIGATION (INTERIM) 14FEB05
.\ GENERAL PROCUREMENT (II) CONTROL: 24JUN02-DCWA-0307-4GNA/T
I S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/ b~e
HONOLULU, HI
/ COMMAND/NAVAIRSYSCOM/00019
MADE AT/DCWA/NCISFO WASHINGTON DC SPECIAL AGENT REFERENCE(S)

_.

(A) NCISFO WASIHNGTON DC ROI.( INTERIMH90CT02(CONTAINS EXHIBITS (1)

THROUGH (57»

(B) NCISFO WASHINGTON DC ROI(INTERIM)/21JUL03 (CONTAINS EXHIBIT
(58) )
(Cl NCISFO WASGHINGTON DC ROI(INTERIM)/7JAN04 (CONTAINS
EXHIBITS (59) THROUGH (61»
( D) NCISFO WASHINGTON DC ROI(INTERIM)/24MAR04 (CONTAINS EXHIBITS (62)
- (66» (E) NCISFO WASHINGTON DC ROI(INTERIM)/17JUL04 (CONTAINS EXHIBITS (67) - (70»

(F) NCISFO WASHINGTON DC ROI(INTERIM)/19AUG04 (CONTAINS EXHIBITS (71) AND (72)

(G) NCISFO WASHINGTON DC ROI (INTERIM)/200CT04 (CONTAINS EXHIBITS (73) - (81»

(H) NCISFO WASHINGTON DC ROI (INTERIM)/17DEC04 (CONTAINS EXHIBITS (82) - (89»

(I) NCISFO WASHINGTON DC ROI (INFO)/10FEB04/I/OFFICE OF NAVAL RESEARCH, ARLINGTON, VA/ALLEGED SOLICITIATION AND RECEIPT OF A GRATUITY BY NAVY OFFICIALS IN HAWAII

CCN: 29JAN04-DCWA-0023-4HNA

EXHIBIT(S)

(90) INVESTIGATVE ACTION: CONTACT WITH NAVAIRSYSCOM IG/21DEC04 ... (DCWA ONLY)

(91) INVESTIGATIVE ACTION: RESULTS OF CONTRACT REVIEW (GSA # GS09K99BHDOOOl)/190CT04 ... (COpy ALL LESS IG,DOD/0023 LESS ENCLOSURES)

(92) INVESTIGATIVE ACTION: REVIEW OF RECORDS FOR CONTRACT # GS09K99BHD0001/17DEC04 ... (COPY ALL LESS IG, 000/0023 LESS ENCLOSURES)

(93) INVESTIGATIVE ACTION: REVIEW OF ANTEON INVOICES FOR CONTRACT # GS09K99BHDOOOl/17DEC04 ... (COpy ALL LESS IG, 000/0023 LESS ENCLOSURES)

(94) INVESTIGATIVE ACTION: MEETING WITH ONR/20DEC04 ... (COpy ALL, LESS IG, 000/0023 LESS ENCLOSURS)

(95) INVESTIGATIVE ACTION: RECEIPT OF IG, DOD SUBPOENA ISSUED TO

RCUH/30DEC04 ... (OCWA/HIHN/0023 LESS ENCLOSURES)

(96) INVESTIGATIVE ACTION: SERVICE OF IG, DOD SUBPOENA TO RCUH/7JAN05 ... (OCWA/HIHN IG/DOD ONLY)

(97) INVESTIGATIVE ACTION: APPROVAL LETTER FOR DCAA AUDIT SUPPORT/28JAN05 ... (COpy ALL LESS IG, 000/0023 LESS ENCLOSURE)

FOR OFFr~se ONLY WARNING

rL '" THIS DOCUMENT IS THE PROPERTY OF THE NAVAL CRIMINAL INVESTIGATIVE SERVICE

Page 1 CONTENTS MAY 8E DISCLOSED ONLY TO PERSONS WHOS£ OFFICIAL DUTIES REOUIRE ACCESS

HERETO. CONTENTS MAY NOT 8E DISCLOSED TO THE PARTYISI CONCERNED WITHOUT SPECIFIC

AUTHORIZATION FROM THE NAVAL CRIMINAL INVESTIGATIVE SERVICE.

____ •• __ ~~ .... VJV '~,"*\,;I,~~l"'ll~ ~ @

SUBJ: S/RESEARCH C(· U~~ION OF THE UNIVERSITY oC AWAII (RCUH) U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(98) INVESTIGATIVE AC'lION: RECEIPT/REVIEW OF ONR

RECOROS/7FEB05 ... (COpy ALL LESS IG, 000/0023 LESS ENCLOSURE) (99) INVESTIGATIVE ACTION: VOICE MAIL MESSAGES FROM RCUH SECURITY

OFFICER 10FEB05 ... (COPY ALL LESS IG, DOD)

(100) INVESTIGATIVE ACTION: CONTACT WITH RCUH SECURITY OFFICER .... ~ ••• 10FEB05 .. ~ (COpy ALL LESS IG, DOD)

EXECUTIVE SUMMARY

1. This investigation began from a Naval Inspector General (NAVINSGEN) inquiry for suspected adultery and travel issues

•~~·nllv.o~l.v~i.n.gllll~~~-:~~~~~~~~~~~~-: Until his retirement,

was a Special Assistant at the Military Sealift Command

(MSC) , Washington Navy Yard, ..... Dlulrl~l·n.g.the 2000 - March 2002 period,

••••••• served as the • • of Task Force 76 (CTF-76),

Amphibious Group One, Amphibious Force Seventh Feet, White Beach, Okinawa, Japan. While at CTF-76, became active in the Modular Command Center (MCC) program. The Office of Naval Research (ONR) Program Manager and funding officer for MCC is/was .....

5 civilian official. alleged relationship

wlth was a focus of the NAVINSGEN inquiry. The initial

focus of.this investigation concerned reported

association with Pacific Research Inst tute (PRI. It was suspected

that benefited from an association with PRI via

proposed Naval Air Systems Command (NAVAIRSYSCOM) contract award # N00421-02-D-3151 (# 02-0-3151) to the S/Research Corporation of the University of Hawaii (S/RCUH) funded through ONR 1IIIIIIt. S/RCUH proposal documentation identified PRI as a management division of RCUH. However, proposed contract # 02-0-3151 was not awarded. The investigation did not develop evidence of a criminal violation by

"1I1I1I1I1I~concerning contract # 02-0-3151 and conflict of interest issues, reference (A) details.

2. Subsequent to reference (A), the investigation continued with a focus on possible false claims issues concerning three S/RCUH staff personnel hired at the direction of ONR

concurrence of S/RCUH The three

S/RCUH personnel and ••••••• 11.

were all hired at salaries exceeding $100,000 per annum. All three S/RCUH personnel had some involvement in the proposal submissions for the proposed contract award * 02-0-3151 to S/RCUH. However, S/RCUH records show that labor for the three personnel were charged against two U.S. Navy grants. No bid and proposal (B & P) labor charges were noted in the S/RCUH records for these personnel, reference (B), exhibit (58) enclosures #12, #16, and #19 pertain. Further, records show that through the University of Hawaii (UOHl, S/RCUH submitted claims for payment of labor and related travel costs for these three personnel, as direct costs to the two U.S. Navy grants, reference

(B), exhibit (58) enclosure (20) pertains.

3. On 16 January 2004, was interviewed concerning

his proposal work for contract # 02-0-3151 and S/RCUH records showing full labor charges to Navy (NAVAIR) Grant # N00421-01-1-0176, S/RCUH

FORljF

Page 2

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WARNING

THIS DOCUMENT IS THE PROPERTY OF THE NAVAL CRIMINAL INVESTIGATIVE SERVICE CONTfNTS MAY 9i OISClOS~O ONLY TO PERSONS WHose OFFICIAL DUTIES REQUIRE ACCESS HERETO. CONTENTS MAY NOT BE DISCLOSED TO THE PARTY!S! CONCERNED WITHOUT SPECifiC

AIITHORllATION FROM THE NAVAL CAIMINAllNVESTIGATIVE SERVICE.

- --,--, m~

SUBJ: S/RESEARCH {-, :l~ION OF THE UNIVERSITY O('.kJII (RCUH) U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

charge/project # 657764. However, maintained he worked on the contract proposal (S/RCUH Project Kai'e'e) during off-duty hours, on weekdays and weekends. In'quiries were also conducted concerning allegations initially reported via reference (F), that during 2003 _'and two other Navy civilian personnel with responsibilities for Office of Naval Research (ONR) sponsored projects, grants, and contracts in Hawa'ii received gratuities from Orincon, a Navy

contractor with business in Hawaii. and the two other Navy

civilian personnel reportedly obtained from Orincon, tickets valued at $250 (each) to attend the Ready-To-Learn fund raising dinner held on Kauai on 22 April 2003. The Ready-To-Learn dinner is an annual event sponsored by Senator Daniel INOUYE of Hawaii. Senator INOUYE is a ranking member of the Senate Appropriations Committee and a

source of funding for ONR programs in Hawaii. Inquiries

with ONR Inspector General personnel concerning this matter surfaced General Ledger (GL) records from Orincon showing that the company paid $5000 for a table supporting the 2003 Ready-To-Learn event (Reference (D) pertains). Orincon GL records also show that ...... 1l reimbursed Orincon $50 in connection with this event. ONR travel records reflect that during the 21 - 26 April 2003 period, ........ traveled on government orders from Washington DC to Lihue, HI (Kauai) to "Attend Meetings at MIDPAC office at PMRF."

4. On 31 March 2004, a GS-14 Electronics Engineer

assigned to NAVIRSYSCOM PMA-265 (Code 4.5T) was interviewed. During

the October 2002 - 2003 period, was detailed to support ONR

Division 035 (Naval Expeditionary Warfare) unde~lrll=:l1~

advised that he provided "legwork" support for. programs at

ONR. Jb provided details and records for his attendance with

':1I1I1t~ia.t the 2003 Ready-To-Learn dinner in Kauai. disclosed

• involvement with funding a 2003 Delivery Order under a'

GeneralServ'icesAdministratibri (GSA). contraot (NFl) with ANTEON that requirerl.i subcontraCt to PICHTR (Pacific International Center for Hign Technology Research). PICHTER is a Hawaii based contractor

reportedly now~ing former S/RCUH personnel~~~~~~~~~.alnld~

. ....... also disclosed that circa December 2003, '

was removed from her ONR MidPAC duties and was reassigned to a

position at ONR headquarters in Arlington, VA. identified

............. as the ONR official who assumed

~ties for ONR MidPAC. had a gene recollection

that b "had some concerns about ONR MidPAC programs.

5. On 3AUG04, a Program Manager assigned to

NAVAIRSYSCOM Code AIR-4.5T, provided an E-Mail with information

reflecting a current affiliation by former with Hawaiya,

a Hawaii based company. Further, the information from

reflects details for a current NAVAIRSYSCOM effort through ARINC (aviation support contractor), that includes a "services" subcontract to Hawaiya. (SUPRA) 'is identified as the originator of the subcontract requirement to Hawaiya.

6. On 16AUG04, an inquiry through the Central Contractor

Registration (CCR) database identified •••• as the

FOR~EONLY Page 3

WARNING

THIS DOCUMENT is THE PROPERTY OF THE NAVAL CRIMINAL INVESTiGATIVE SERVICE CONTENTS MAY 9li DISCLOSED ONLY TO PERSONS WHOSE OFFICIAL DUTIES AeaUI~E ACCESS HERETD, CONTENTS M"V NOT Sf DISCLOSED TO THE PARTY,s, CONCERN£O WITHOUT SPECIFIC

AUTHORIZA TlON FAOM THE NAVAL CRIMINAL INVESTIGATIVE SERVICE,

\ C\ ,

/

;

SUBJ: -S~~~~·~::~ Z~:~:!ION OF THE UNIVERSITY ['}''AlII U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(RCUH)

business contact for Hawaiya Technologies, LLC of Honolulu, HI. Hawaiya is identified as an Asian-Pacific American owned and Minority owned small business. AutoTrack corporate database Lnqu i.r Les concerning Hawaiya were negative.

7. On 20AUG04, Procuring Contracting Officer (PCO) interviewed regarding the ARINC subcontract to Hawaiya. provided no information indicating that the ARINC subcontract wa

a legitimate procurement request. Concerning the Grant issue, cknowledged she was the Grant Officer for Which'_ and

ad been hired by S/RCUH per ONR direct10n .

•• ~related that she could have requested an audit concerning

sfor the labor charged by anct_ However,

~stated a view that .this was a battle that could not be won,

and was not worth fighting. related that with grants, the

government has less enforceable hooks than with a contract, and grants are a more "hands-off" arrangement.

~a~ On 8SEP04, , Contracting Officer's Representative

(COR) for the GSA/ANTEON contract was interviewed. reported

that~improperly directed PICHTR (Pacific International Center For High Technology Research) to work under the contract without going through ANTEON - the Prime contractor ...... also disclosed that ~had requested unusual Other Direct Costs (ODC's) be included in the contract for expenses of ANTEON employees moving to Hawaii.

9. On 9SEP04, inquiries were conducted concerning Hawaiya Technologies with Hawaii Department of Commerce, Business

Registration Division. was the only individual listed

on the corporate documents. None of the documentation obtained showed any ownership, business, or financial interest by~

10. On 10SEP04, was reinterviewed concerning the ARINC

subcontract to Hawaiya. said that during JUN04, .........

approached him concerning MRRCIS (Military Rapid Response Command Information System, a Homeland Defense Program initiative, for

possible application to the F/A-18 program. According to the

subcontract to Hawaiya using the ARINC contract was a 1imiteQ effort to fund a SEP04 briefing of MRRCIS at NAVAIRSYSCOM by .......

_'contended that _ had no involvement in the MRRCIS initiative.

11. On 14SEP04, a Senior Acquisition Specialist for

ANTEON working as support for ONR Code 035, was interviewed. "111111.

worked for __ from NOV02 until DEC03. related that

was responsible for Congressional Plus-Up funds, specifically Hawaii related appropriations supported by Senator Daniel INOUYE of Hawaii.

1I1I1I1I •• duties under "included the creation of Purchase.

Requests (PR's) as funding documents under ONR's Integrated Naval Research Information System (INRIS). . disclosed that under ....... there were problems with the execution of program money, not

how money was physically processed ........ said that wanted

WARNING

THIS DOCUMENT IS THE PROPERTY Of THE NAVAL CRIMINAL INVESTIGATIVE SERVICE CONTENTS MAY 8E DISCLOSED ONLY TO PERSONS WHOSE OFFICIAL DUTIES REOUIRE ACCESS HERETO. CONTENTS MAY NOT BE DISCLOSED TO THE PARTYISI COIIICEANEO WITHOUT SPfCIFIC

AUTHORIZATION fAOM THE NAVAL CRIMINAL INVESTIOATIVE SERVICE.

___ ~ .. v~ ............ n-U..JV l-qUN~ ')

SUBJ: S/RESEARCH cC-~.:0;~TION OF THE UNIVERSITY c('_ lAWAII

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(RCUH)

to maintain control of her contracts. appropriated for certain things would them. ~ said that _wanted

According to _ money not necessarily be spent on to spend the money her way.

12. On 17SEP04, Participant _ provided a verbal briefing for the status of this case to Assistant U.S. Attorney (AUSA) Harry YEE (Civil Division) and AUSA Michael SEABRIGHT (Criminal Division).

AUSA YEE and AUSA SEABRIGHT outlined several questions for information needed to determine their future interest in this case.

A written response was prepared for the questions posed by AUSA YEE and AU SA SEABRIGHT.

13. On 27SEP04, witness sent an email to Participant

with a listing of the known active contracts and grants for programs during the NOV02 - DEC03 period.

14. On 29NOV04, a meeting was conducted with Trial

'Attorney, Fraud Section, Criminal Division, DOJ. recommended several primary steps for this inve~tigation, including

steps to obtain roffers for consider of criminal immunity for

key witnesses and

15. On 3DEC04, a case briefing was provided tol ....... • Office of Naval Research (ONR), Arlington, VA .

...--

disclosed that ....... has accepted entrance into a doctoral (PHD}

program at the University of Hawaii (UOH) starting sometime in

January 2005 ......... indicated that ONR is considering supporting ~participation in this program.

16. On 7DEC04, audit support for this case in Hawaii was formally requested from the Defense Contract Audit Agency (OCAA), Western Regional Office.

17. On 14DEC04, a request was forwarded to the Inspector General, ~::tC Department of Defense (IG, DOD) to obtain an IG subpoena for required

procurement records from S!RCUH.

lB. On 16DEFC04, relevant case reports and related S/RCUH records obtained for this case, were forwarded for audit review to the DCAA Western Regional Office, La Mirada, CA.

19. During DEC04, reviews of file documents and invoices for GSA contract # GS09K99BHDOOOl awarded to ANTEON and subcontractor PICHTR involving _were reviewed. The reviews surfaced possible vulnerabilities with high labor hours, rates, and charges applied to the Consultant labor category under the contract.

20. Also duringDEC04, a meeting was held with the ONR official who replacedillllllJn managing ONR MIDPAC program initiatives in Hawaii. According to the official, lIIIIIIloperated close to the line of propriety in her business operations for ONR. However, the official did not report knowledge of any criminal violations byllllllill

FORl.lljilS"lIIiJPZ mrfSE ONLY

PageS

WARNING

THIS DOCUMENT IS THE PROPERTY OF THE NAVAL CRIMINAL INVESTIGATIVE SERVICE CONTmTS MAY 8E OISCLOSEO ONLY TO PEASONS WHOSE OFFICIAL DUTIES REOUIRE ACCESS HERETO_ CONTENTS MAV NOT BE DISCLOSED TO THE PARlYIS) CONCERNED WITHOUT SPECIFIC

AUTHORIZATION FROM THE "'AVAL CRIMI"'AL INVESTIGATIVE SERVICE. , a 2...

"" - - - _. ¥ - ~ ~.... V oJ V I ":t ","n/ tt

SUBJ: S/RESEARCH ~~. 2~ .i;ION OF THE UNIVERSITY t.

' .. ,'

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

lA.;;Jir (RCUH)

21. On 7JAN05. an IG, DOD subpoena was served upon S/RCUH to obtain additional records needed to complete the audit work for this case.

22. During FEBDS, the for S/RCUH voluntarily

contacted NCISFO Washington DC, and reported that he has relevant information and knowledge of possible evidence for this case. The S/RCUH has requested to be personally interviewed for this investigation.

23. Due to venue considerations and the location of primary witnesses, control of this investigation is transferred to NCISFO Hawaii for completion.

NARRATIVE

1. This investigation is being pursued for suspected violations of 31 USC, Section 3729 (Civil False Claims Act). Several criminal statutes, including 18 USC 666 (Theft Concerning Programs receiving Federal Funds} and 18 USC Section 208 (Acts Affecting a Personal Financial Interest) may also apply.

2. (U}During October 2003, notification was received that S/RCUH

had reported the acquisition of computer media at RCUH conta ng data for ~programs worked at S/RCUH of possible relevance to this inve~. However,1IIIIIIL disclosed that there are no requirements at S/RCUH or ~ersity of Hawaii for banners on their computers used for government work, and employees are not required to sign any user agreement. The computer media and related items reportedly holding data concerning

~rams worked at S/RCUH were subsequently transferred by ~~~:~~ ....... to NAVAIRSYSCOM connected with security issues for the S/RCUH hold~ngs. The items are classified at the SECRET level, Exhibit (90) pertains.

3. During September 2004, NAVAIRSYSOM Contract specialist~ II ~

",was interviewed concerning GSA contract #; GS09K99BHDOOOl awarded w::. "f"to ANTEON using Pacific International Center For High Technology

Research (PICHTR) as a subcontractor, Reference (G), paragraph (8),

Exhibit (75) pertains. _ reported that _improperly directed

PICHTR to work under the contract without going through ANTEON', and

disclosed that ~equested unusual ODC's (Other Direct Costs) be

included in the contract. ~ also mentioned that had a

close relationsh with PICHTR principa11l" .. "IIII" former S/RCUH

4. Subsequent to Reference (H), participant -.. completed a report for a review of GSA contract #; GS09K99BHD0001~ighlights from the contract review are:

Awarded 14FEB03 to ANTEON Corporation, San Diego, CA Contract was for support for R&D (Research and Development) programs for the ONR MIDPAC office

Contract Performance Period: 19FEB03 - 18MAY04

Program Manager: ~ntil November 2003, thentl .... ~

FORn~NLY Page ~ "''''- ..,.

WARNING

THIS DOCUMENT IS THE PROPERTY OF THE NAVAL CRIMINAL INVESTIGATiVe SERVICE

CONT£NTS MAY BE DlSClOSEO ONLY TO PERSONS WHOSli OFFICIAL OUT'ES REQUIRE ACCESS

HERETO. CONTENTS MAY NOT BE DISClOSfO TO THE PARTYIS) CONcelWEO WITHOUT SPECIFIC

AUTHORllAnON FROM THE NAVAL CRIMINAL INVESTIGATIVE SERVICE.

L.lJ.eJUL'lUL-Ul...lIVt-I.-U."JU I ":I ........ ,.L @...

SUBJ: S/RESEARCH "-' ?ORI __ .l5N OF THE UNIVERSITY '-'JAW.

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

ONR

More details for the review of contract # GS09K99BHDOOOl are provided in Exhibit (91).

5. In connection number of related Specialist identified

with the review of GSA contract # GS09K99BHD0001, a records were subsequently received from Contract

A subsequent review of the records

of possible relevance:

12FEB03 email from (ANTEON) responding to .......... question concerning any problems with GSA with a situation where a prime (ANTEON) had less Level of Effort than a subcontractor. ~reported his inquiries determined that there would be no problem, and added that per your ......... request, no one at GSA was queried.

14FEB03 Documentation for contract # GS09K99BHD0001, Task Order # T0303DSM012 reflecting that this is a time and materials ANSWER (Applications 'N Support for Widely-Diverse End-User Requirements) Task Order contract. Contract Clause H.l4.4 applies to the purchases of ~OC's. Reflects that Task Order # T0303DSMOl2 is fully funded at ceiling price of $499,623.

Modification # R320030863/P002, contract # GS09K99BHD0001, Task Order # T0303DSM012 issued 14MAY03:

* Increased the Task Order value by $2,462,758 * Increased labor hours from 6,354 to 30,226

* Increased labor costs from $438,631 to $2,478,937

* Increased ~OC's from $60,991 to $483,445. DOC's included $50,000 for relocation of two individuals (NFl).

More details for the foregoing are provided in Exhibit (92).

6. Also in connection with contract # GS09K99BHDOOOl, Task

Order # T0303DSM012, provided to participant ..... a CD (compact

disk) containing the invoices submitted by ANTEON that included the charges billed by subcontractor PICHTR under the contract. RA reviewed printouts for the ANTEON invoices on the CD, and noted possible vulnerabilities with high labor hours, rates, and charges applied to Consultant labor category 49 under the contract. ANTEON's billing # 802-37A-09R for the billing period ending 30APR04 reflects a cumulative amount of 5,893 labor hours and a cumulative billing amount of $691,308 for charges to Consultant labor category. Also for that same ending period, total billed miscellaneous ODC charges were recorded at $130,086. The consultant(s) for PICHTR are not identified by name in the ANTEON billing documentation. The CD provided byllllllis maintained with the case file. Printouts showing more details for the above ANTEON invoices are provided with Exhibit (93) .

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THIS DOCUMENT IS THE PROPERTY OF THE NAVAL CRIMINAL INVESTIGATIVE SERVICE CONTENTS MAY BE OISC~OSEO ON~Y TO PEASONS WHOSE OffICIA~ DUTIES REOUIRE ACCESS HEAETO. CONTENTS MAY NOT 8E DISC~OSEO TO THE PARTYISI CONCERNED WITHOUT SP£ClfIC AUTHORIZATION FROM THE NAVA~ CRIMINA~ INVESTIGATIVE SERVICE,

SUBJ: S/R~~-E~:~~ ;:"'01!roN OF THE UNIVERSITY oC ,All U.S. NA V AL CRIMINAL INVESTIGATIVE SERVICE

(RCOH)

7. On 20 December 2004, a meeting was conducted with , a

GS-15 Senior Engineer for ONR. a contractor (ANTEON)

acquisition specialist supporti also attended the meeting.

CIRCA December 2003, _assumed responsibilities for_ Navy sponsored ONR MIDPAC program initiatives in Hawaii. During the meeting, _disclosed that_ initiated Procurement Request (PR) funding actions for her programs/contracts/grants from remote locations as well as from ONR Headquarters in Arlington, VA using the INRIS (Integrated Naval Research Information System). During the

meeting, was asked about GSA contract # GSOBK998HDOOl awarded

to ANTEON that used PICHTR as a subcontractor. Specifically,"""'" was asked to explain the 1,733 hrs reflected for a PICHTR consultant (NFL) for ANTEON billing # B02-27A-07 for the December 2003

performance period. and disclosed that the 1,733

consulting hours billed was a total figure for several PlCHTR consultants billed under the contract consultant labor category

(#49). However, both lacked knowledge that formerllllllllllllllllllil obtained any work/compensation under the GSA contract .......... related his view that _operated close to the line of propriety in her business operations for ONR. However, did not report knowledge of any criminal violations by_ Exhibit (94)

pertains.

B. On 30 December 2004, notification was received from the Office of Investigative Policy and Oversight, lG, DOD, that the request for an lG subpoena for specific records of S/RCUH (Reference (H) pertains), had been approved, Exhibit (95) refers.

9. On 7 January 2005, participant , S/RCUH, and se

...... with the lG, DOD (96) pertains.

subpoena to RCUH

10. On 28 January 2005, notification was received from the Western Region office of DCAA, that the request for DCAA audit support for

this case had been approved: Senior DCAA Auditor will

provide the requested audit support, Exhibit' (97) pertains.

11. On 7 February 2005, RA met a2ain With. ONR acquisition

specialist • provided RA with additional

records pertaining to ONR funding actions by relative to ONR

Grant # N00014-01-1-0562. Also, in response to previous inquiries by RA concerning GSA contract It GSOBK99BHDOOOl, _ provided a name list of five PICHTRconsultants and one ANTEON consultant that

charged labor under the contract. Former on this list, Exhibit (98) details.

name was not

12. On 4 and also on 10 February 2005, RA received unsolicited voice

mail messages from (Supra), the Security Officer for the

S/RCUH. The voice mail messages from indicate he has

information and knowledge of potential evidence for this case. During the 4 February 2005 voice mail message, ....... stated he had

current knowl of the S/RCUH hard drive of former S/RCUH_

(supra) as potential evidence for this case,

FO~USEONLY Page 8

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THIS DOCUMENT IS THE PROPERTY OF THE NAVAL CIlIMINAL INVESTIGATIVE SERVICE CONTENTS MAY aE DISCloseD ONLY TO PERSONS WHOSE OFfiCIAL DUTIES REQUIRE Access HERETO. CONT£NTS MAV NOT 91! DISCLOSED TO THE PARTYfSI CONCERNED WITHOUT SPECIFIC

AUTHORIZATION FROM THE NAVAL CRIMINAL INVESTIGATIVE SERVice.

\ crt ....

• •••• V"_' V I "2\:J"'~/'l' )

SUBJ: S/RESEARCH d S8bTION OF THE UNIVERSITY ({ ".~~WAII

\ ~

U.S. NAVAL CRIMINAL INVESTIGATIVE SERVICE

(RCUH)

Exhibit (99) pertains.

13. On 10 February 2005, RA telephonically contacted S!RCUH Security Officer~in response to his 4 and 10 February 2005 voice mail mes~RA. During the telephonic contact, ~requested to be personally interviewed for this investigation with or without the presence of an RCUH representative, Exhibit (100) pertains.

14. Due to venue considerations and the location of potential subjects and primary witnesses for this case, this investigation is transferred to the control of the NCIS Fieid Office Hawaii for completion.

PARTICIPANTS

~~o~~al Agent, NCISFO Washington DC Special Agent, NCISFO Washington DC

ACTION

R. HIHN .•. Case control of this investigation is transferred to NCISFO Hawaii. Due to continued interest by senior officials at ONR Headquarters, it is requested that NCISFO Washington DC be included on distribution for all future ROI's. Also please ensure that all future reports (less exhibits) are provided to the IG, DOD office reflected below.

Prompt contact with AUSA SEABRIGHT is recommended concerning S!RCUH Security Officer ~ stated request to be interviewed for this investigation.

DISTRIBUTION NCISHQ: 0023 ACTION: HIHN(M}

INFO:

DCWA

Commander, Office of Naval Research{M) Office of the Inspector General

Attn: _

800 Nor~reet

Arlington, VA 22217-5660

b~

Commander, Naval 'Air Systems Command(M) Office of the Ins tor General AIR-OOGl (Attn: 47123 Buse Road Patuxent River, MD 20634

InsPftctor General, Department of Defense(M) Deputy Assistant Inspector General Investigative Poli and Oversight

ATTN: SA

1037

FOR OilJllfl!!_USE ONLY

Page 9 LAST _ V2 LNY

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THIS DOCUMENT IS TH£ PROPERTV OF THE NAVAL CRIMINAL INVeSTIGATiVe SERVICE CONHNTS MAV lIE DISCLOSED ONL V TO PERSONS ..... HOSE OFFICIAL DUTIEs AEQUIRE ACCESS

HERETO. CONTENTS MAV NOT BE DISCLOSED TO THE MANIS) CONCERNED WITHOUT SPECIFIC \ q"" . AUTHORIZATION FROM THE NAVAL CRIMINAL INVESTIGATiVe SERVICE, ¥

400 Army Arlington, VA

A' .... ,.

"'"1

:i"

883242 10:15 20050215 IN:SSDEMAIL #48696 OUT:HIHNEXLIFE #7808

INVESTIGATIVE ACTION 21DEC04

CONTROL: 24JUN02-DCWA-0307-4GNA/T S/RESEARCH CORPORATION OF THE UNIVERSITY OF HAWAII (RCUH)/

HONOLULU, HI

CONTACT WITH NAVAIRSYSCOM IG

1. During October 2003, (RA) received notification

that S/RCUH had reported the acquisition

of computer media and rela ems at RCUH containing data and

possible email records for Navy programs/grants/contracts worked at

~CUH for ONR MIDPAC Program/Funding official~ However, ....., disclosed that there are no requirements~or the University of Hawaii for banners on computers used for government work, and employees are not required to sign any user agreement, Enclosure (A) pertains. .

2. The items acqui.red by_ were subsequently transferred to NAVAIRSYSCOM connected with security issues with the RCUH data. On

21DEC04, NAVAIRSYSCOM IG inves provided RA with

documentation for the transfer of the RCUH terns NAVAIRSYSCOM by

RCUH Security Officer The documentation reflects that the

RCUH items from are classified at the SECRET level, Enclosure

(B) pertains.

ENCLOSURE

(A) Email from to RA/290CT03

(B) Facsimile from NAVAIRSYSCOM IG investigator II1II to RA and attached correspondence/21DEC04

REPORTED BY:

OFFICE:

V2 LNY

~--------------------------------

From:

Sent:

To:

Subject:

~@soest.hawaii.edu] ~~ ..... y .. ,.1 ber 29,20032:15 PM

Re: RCUH files

lIIIIIte one hard drive in question contains information that was transferred

from 22 other hard drives. UH

property and 50% were purchased with funding from the contract or grant. 1.There is no requirement at RCUH nor UH_for employees-to sign a user-

agreement and oahnei-s-were nC:it--r·equired. ,--"

The NAVAIR contract 00254 specifies: The contractor shall comply with

the requirements of the Information Systems Security program as

described in NAVAIRWARCENACOIVINST 5239.1.

Approximately 50% of these hard drives are

All systems, regardless of the level of

data

processed, will be accredited in accordance with the above instruction.

The OD254 was not incorporated into the contract until May 18, 2003.

I

had requested the above instruction from the NAVAIR COSR and to date have

not received it. If you are referencing a requirement(user agreement/banners) contained in this document, then I have no knowledge of

that stipulation. All information was stored on the harddrives prior to issuance of the 00254.

-

From:

To:

Sent:

Subject: RE:

>_.

>

> Thanks for the info. You mentioned that the UH and RCUH personnel

> working on the NAVAIR and ONR contract/grants did not have banners on their

> computers. But weren't these personnel required to sign user agreements

for

> their computer use for government contract/grant work? If so, I will need

> to get copies of all of their signed user agreements to check the specific

> language used in the agreements to see it meets the requirements to allow

a

> review of their data and email records.

>

> If you could, please check on that and get back to me. >

> Thanks for your help.

>

> >

1

, i (

> NClS Field Off1ce Wash nqcon

> 202-!F~., >_'NCIS.NAVY,MIL

>

>

>

>

>

>

> > ----------

> > From:IIIIIIIIIIWSMTPllllllllsoest.hawaii.edu]

> > Sent:~Octobe~003 3:58 PM »To:~

> > Subj~les

(

> >

~ ~your phone call request, following sensitive information > > provided. Subject hard drive in question contains information removed

> > from UH and RCUH employee hard drives (May '03). Subject information was

> > produced while working on NAVAIR contract N00421-03-C-0013, ONR grant

> > N00014-01-1-0562, and NAVAIR grant N00421-01-1-0001/0176. ONR Program

> > Manager for all three entities isllllllllllll lAW NISPOM, Chapter 4, > > Section 2, paragraphs 216, 217, a~ect information may require

> > protection at a classification level. > >

~ ~ WIIIIIIIP

> > 2525 Correa Road > > HIG 322

> > Honolulu, HI. 96822 > > 808-956-3179

> > 808-956-8985 Fax > >

>

2

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