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Case 3:18-cr-00428-BR Document 1 Filed 09/12/18 Page 1 of 10

FILED12 SEF' 'it~ 15:~~6USDC-ORP
UNDER SEAL

UNITED STATES DISTRICT COURT

DISTRICT OF OREGON

PORTLAND DIVISION

UNITED STATES OF AMERICA 3:18-cr- QQL{ 2g-43K_
v. INDICTMENT

DOMINIC CAPUTO, 18 U.S.C. §§ 1343 and 1001
Forfeiture Allegations
Defendant.
UNDER SEAL

THE GRAND JURY CHARGES:

1. The Oregon National Guard (ONG), located in the District of Oregon, is a federally

mandated and equipped military organization under the civilian direction of the Oregon Military

Department, with the Governor of Oregon as its Commander-in-Chief. It responds to state and

national emergencies, military conflicts and natural disasters, and conducts search and rescue

operations.

2. Beginning in 1998 and at all times relevant to this Indictment, the ONG operated and

maintained the Oregon Sustainment Maintenance Site (OSMS) at Camp Withycombe, an Oregon

Military Department installation. OSMS supports readiness and training of the United States

military by refurbishing out-of-service, electronic equipment owned by the Department of

Defense and fielding those items to other military bases or installations or, if necessary, re-

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deploys the items in the event of an emergency or declaration of war. The Power Division at

OSMS was responsible to rebuild and repair small and large engines, generators, tires and

various other projects. At all times relevant to this Indictment and through 2015, OSMS was the

only maintenance site in the United States capable of repairing and rebuilding certain engines in

support of the federal military supply system.

3. Funds for parts and labor of the Power Division were primarily provided by the U.S.

Army Communications-Electronics Command (CECOM) under the National Maintenance

Program (NMP) and the RESET Program (RESET). Under both the NMP and RESET for each

Fiscal Year (FY) during the relevant time period, CECOM authorized the amount of work (in

dollars) to be performed by the Power Division through a Military Interdepartmental Purchase

Request (MIPR).

4. Under the RESET, during the course of each FY, the Power Division sought

reimbursement for work performed and/or advances for work in process, that is, work that had

begun but had not been completed, from CECOM using a Request for Billing Against a MIPR

(Request). Attached to each Request was a list of the Power Division work order numbers, the

cost of the work performed with each work order, and, ifthe work had begun but was not

complete, the date the work would be complete. Upon receipt and approval, CECOM caused the

requested amounts to be wired to OSMS.

5. Under each FY MIPR, when the Power Division began work on a generator, engine or

other item, the Power Division generated a work order; each work order had an assigned number.

Each work order specified the amount for parts and the amount of the labor to perform the work.

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A work order number was required to seek reimbursement through a Request or otherwise for

work performed or to obtain an advance on work that was in process. Under the NMP and the

RESET once work was completed, the Power Division closed the work order and certified that

the work had been performed on the item. Under the NMP, once the work order was closed, the

work could be reimbursed by CECOM. Under both programs, once the work order was closed,

the item was listed in the Power Division's inventory as available for shipment to other military

bases or installations by CECOM. As part of its internal controls, CECOM was required to

confirm that work was performed, or had been completed on prior advances, by reviewing work

orders and other information generated by closing the work order, before payment could be

wired to OSMS.

6. At all times relevant to this Indictment, the DEFENDANT DOMINIC CAPUTO,

(CAPUTO), was the Program Manager for the Power Division of OSMS. As part of his

responsibilities, CAPUTO directed, controlled and supervised the work performed at the Power

Division and the submission of claims to CECOM on behalf of the Power Division. CAPUTO

and other Power Division employees at CAPUTO's direction, electronically signed the Requests

and certified that all work was performed or was "in-process" and completed as outlined in the

work order and consistent with the MIPR, that payment was due and that such work had not been

previously requested. In the majority of instances during the time relevant to this Indictment,

CAPUTO sought reimbursement for work that was already performed and represented to

CECOM through the Requests and closed work orders that work was complete and ready to be

shipped to a military base or installation. In a few instances, CAPUTO sought advancement for

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work that was in-process, that was purportedly already started, and represented that the work

would be performed by a specific date.

COUNTS 1-4
(Wire Fraud)
(18 u.s.c. § 1343)

7. Paragraphs one through six above are realleged and incorporated by reference. Beginning

in or about 2012, and continuing through in or about November 2014, CAPUTO, devised and

intended to devise a material scheme to defraud the United States and to obtain money and

property by means of materially false and fraudulent pretenses, representations and promises.

SCHEME AND ARTIFICE TO DEFRAUD

8. It was part of the scheme and artifice to defraud that CAPUTO sought reimbursement

and funds from CECOM for parts and labor to repair and rebuild engines, generators and other

parts that he knew were not completed and/or would not be completed by the Power Division.

9. CAPUTO knowingly and intentionally made the following materially false statements

and omissions to CECOM in furtherance of his scheme and artifice to defraud:

a. that specific work had been completed and parts for the work were purchased

consistent with the MIPR and work orders, when in fact, CAPUTO knew that the

work in the Requests and work orders had not been completed;

b. that specific work was in process and would be performed and parts would be

purchased consistent with the MIPR and work orders, when in fact, CAPUTO

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knew that the work listed in the Requests and work orders was not in process and

would not be performed as represented;

c. that engines, generators and other items had been rebuilt or repaired as specified

in the MIPR and therefore, were available for shipment by CECOM to other

military bases or installations, when in fact, CAPUTO knew that the engines,

generators and other items had not been rebuilt or repaired as specified in the

MIPR and, as a result, were not available for shipment by CECOM to other

military bases or installations; and

d. that all work on prior MIPRs were complete and all funds previously paid against

a Request or work order were used as specified in the MIPRs, Requests and work

orders.

10. It was part of the scheme and artifice to defraud that CAPUTO and other Power Division

employees at CAPUTO's direction, prepared false work orders to support Requests to CECOM.

CAPUTO knew that the work represented in the work orders had not been performed and/or

could not be performed as specified.

11. It was further part of the scheme and artifice to defraud that CAPUTO and other Power

Division employees at CAPUTO's direction, closed work orders to represent that work had been

completed and that the items were available in the Power Division's inventory for CECOM to

ship to other military bases or installations. CAPUTO knew that the work represented in the

closed work orders had not been performed and that the items represented in the Power

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Division's inventory as a result of the closed work orders, were not available for shipment by

CECOM.

12. It was further part of the scheme, that in order to conceal CAPUTO's misrepresentations,

CAPUTO directed employees of the OSMS Power Division to use their government credit cards

to purchase engines, generators or other parts necessary to fulfill requests from other military

bases or installations for items that CAPUTO, or other Power Division employees at his

direction, had certified had been repaired by the Power Division and previously billed to and

reimbursed by CECOM.

13. It was further part of the scheme and artifice to defraud that during FY 2013 CAPUTO

and other Power Division employees at CAPUTO's direction, closed hundreds of work orders

before work was complete on engines and generators, including on the L-70 Yanmar engines.

Despite the fact the work was not complete and would not be completed, CAPUTO had received

and sought reimbursement for these items through closed work orders and Requests to CECOM.

CAPUTO did not inform CECOM that work previously reimbursed or paid for in-process had

not been performed. The items on these closed work orders continued to be listed on the Power

Division's inventory as items available to be shipped by CECOM.

14. It was part of the scheme and artifice to defraud that in FY 2014, CAPUTO billed

CECOM for the repair and rebuilding of John Deere Diesel Engines. More than 60 of the

engines had previously been repaired, rebuilt and billed to CECOM by CAPUTO during FY

2012 and FY 2013. It was further part of the scheme and artifice to defraud that CAPUTO and

other Power Division employees at CAPUTO's direction, instructed employees of the OSMS

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Power Division to remove serial numbers and identifying engine plates in order to conceal that

the John Deere Diesel Engines had been previously repaired and billed to CECOM.

15. During the course of CAPUTO's scheme and artifice to defraud, CAPUTO sought

reimbursement for repairing and rebuilding more than 1,380 engines, generators and other parts

that in fact, had not been repaired or rebuilt and were not available for service by the military.

Over the course of CAPUTO's scheme and artifice to defraud, CAPUTO billed or caused to be

billed more than $6,400,000 for work that was not performed.

EXECUTION OF SCHEME AND ARTIFICE TO DEFRAUD

16. On or about the dates listed below, in the District of Oregon and elsewhere, CAPUTO

having knowingly devised and intended to devise the aforementioned material scheme and

artifice to defraud, and to obtain money and property by means of materially false and fraudulent

pretenses, representations and promises, and through omissions of material fact, for the purpose

of executing and attempting to execute the scheme and artifice, did knowingly cause to be

transmitted in interstate and foreign commerce by means of wire communications, writings,

signals, and sounds, the following transfers of money via interstate wire:

Count Origination Final Destination
1 October 10, 2013 Maryland Oregon
2 December 2, 2013 Maryland Oregon
3 January 29, 2014 Maryland Oregon $22,195
4 April23,2014 Maryland Oregon $80,400

All in violation of 18 U.S.C. §1343.

Ill

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COUNTS
(False Statement in a Document)
(18 U.S.C. § 1001(a)(3))

Paragraphs one through sixteen above are realleged and incorporated by reference. On or

about June 2, 2014, in the District of Oregon, CAPUTO, did willfully and knowingly make and

use a false writing and document to CECOM, knowing the same to contain a materially false,

fictitious, and fraudulent statement and entry in a matter within the jurisdiction of the executive

branch of the Government of the United States, by preparing a work order and run test data

indicating that work had been performed on a John Deere Diesel Engine bearing the serial

number 780656, when in fact, CAPUTO knew it was false and the work performed was on a

John Deere Diesel Engine, serial number 240509. CAPUTO instructed employees to remove the

original serial number from the John Deere Diesel Engine and replace it with a different one to

conceal that CAPUTO had billed CECOM for the same work in FY 2012 and FY2013.

All in violation of 18, U.S.C. § 1001.

FORFEITURE ALLEGATIONS

1. The allegations contained in Counts One through Five ofthis Indictment are

realleged and incorporated by reference for the purpose of alleging forfeitures pursuant to Title

18, United States Code, Section 982(a)(3).

2. Upon conviction of the offenses in violation of Title 18, United States Code,

Sections 1341 and 1001 set forth in Counts One through Five of this Indictment, the

DEFENDANT DOMINIC CAPUTO, (CAPUTO), shall forfeit to the United States of

America, pursuant to Title 18, United States Code, Section 982(a)(3), any property, real or

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personal, which represents or is traceable to the gross receipts obtained, directly or indirectly, as

a result of such violations.

3. If any of the property described above, as a result of any act or omission

of CAPUTO:

a. cannot be located upon the exercise of due diligence;

b. has been transferred or sold to, or deposited with, a third party;

c. has been placed beyond the jurisdiction of the court;

d. has been substantially diminished in value; or

e. has been commingled with other property which cannot be divided

without difficulty,

the United States of America shall be entitled to forfeiture of substitute property pursuant to Title

21, United States Code, Section 853(p), as incorporated by Title 18, United States Code, Section

Ill

Ill

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Ill

Ill

Ill

Ill

Ill

Ill

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982(b)(l) and Title 28, United States Code, Section 2461(c).

All pursuant to 18 U.S.C. § 982(a)(3) and 28 U.S.C. § 2461(c).

Dated: September 12, 2018 A TRUE BILL.

OFFICIATING FOREPERSON

Presented by:

BILLY J. WILLIAMS
United States Attorney

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