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UNITED STATES mSTRTCT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

UNITED STATES OF AMERICA,
v.

) ) ) ) ) )

Criminal No.1

iCR0609

) VIOLATIONS:

Count One: 18 U.S.C. § 1349 (conspiracy)

1) RAUL BORCUTA,

)

2) ZACHERY TAYLOR,

3) JARRED CLOSE,
Defendants.

) ) ) ) ) )

Count Two: 18 U.S.c. § 1343 (wire fraud)
Count Three: 18 U.S.c. § 134 1
(mail fraud)

Count Four: 18 U.S.C. § 134 I
(mail fraud)
Count Five: 18 U.S.c. § 201

(b)(l)(A)-(C)

(bribery)

Count Six: 18 U.S.C § 20l(b)(l)(A)-(C)
(bribery)

Count Seven: 18 U.S.C. § 201(b)(2)(A)-(C) (bribery)
Count Eight: 18 U.S.c. § 201(b)(2)(A)-(C) (bribery)
Count Nine: 18 U.S.c. § 641

(theft of government funds)

INDICTMENT
The Grand Jury charges that:

BACKGROUND
1. For the purposes ofthis indictment, the "relevant period" is that period from in or

about October of2009 until at least in or about October of2010.
2. Following the overthrow of

the Taliban regime, the United States and allied

nations undertook an effort to develop the infrastructure and economy ofthc Islamic Republic of

Afghanistan (hereinafter "Afghanistan"). The development projects that the United States
undertook in Afghanistan included building transportation networks, improving Afghanistan's

energy infrastructure, and constructing healthcare and educational facilities. To complete these
development projects, the United States sent a Provincial Reconstruction Team (PRT) to Farah,
Afghanistan. The PRT was composed of individuals in the

United States Military and other

United States Government agencies. The PRT was funded with money from the United States
Treasury and it had autho;ity to enter into contracts on behalf of

the United States.

3. The PRT issued contracts that were fundcd with money from the Commander's
Emergcney Response Program (CERP). The purpose of

the CERP was to enable United Siates

Military commanders to respond to urgent humanitarian relicf and reconstruction requirements
within thcir area of

responsibility by carrying out programs that would immediately assist the

indigenous population. The CERP was funded with appropriations from the United States

Government. In November of 2003, Congress passed the first appropriation for CERP as part of
Public Law 108-106, the "Emergency Supplemental Appropriations Actfor Defense and For the

Reconstruction of Iraq and Afghanistan, 2004." Since 2004, Congress has made additional
appropriations of CRRP funds in Department of Defense annual and supplemental

appropriations. Disbursements of CERP funds were typically made through wirc transfers made
from accounts in Afghanistan held by the United States Governmcnt to accounts held by the
con~raetor.

4. Defendant JARRED CLOSE was a Staff Sergeant in thc United States Army

Active Guard Reservc Program. At all times material herein, JARRED CLOSE was an oí1cer,
employee, or person acting for or on behalf of

the United States Department of Defense.
Sergeant in the United States Army

S. Defendant ZACHERY TAYLOR was a Staff

Active Guard Reserve Program. At all times material herein, ZACHERY TAYLOR was an

ofIcer, employee, or person acting tor or on behalf ofthe United States Department of Defense.

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6. CH, a person known to the grandjury, was an individual residing in the Northern
District of Ilinois.

7. Harris Bank, N.A. (hereinafter "Harris Bank") was a corporation headquartered in

Chicago, Illinois that did business as a lending institution throughout the United States, including
thc Northern District of

Ilinois. Money deposited with Harris Bank was insured by the Federal

Deposit Insurance Corporation.

8. Afghanistan International Bank was a corporation hcadquartcrcd in Kabul,

Afghanistan, which did business in Afghanistan.
9. In or about May of 2009, TAYLOR and CLOSE were deployed to Afghanistan

and assigncd to the PRT in Farah. TAYLOR worked as a paying agent and CLOSE was a project
officer. Their dutics incILded negotiating and executing on behalf of the United States

Government contracts funded with CERP lunds. TAYLOR's and CLOSE's rcsponsibilities
included identifying contractors to pertorii work for the PRT, defining the scope of

work that

was to be performed, and authorizing payment requests submitted by firms and individuals that
were selected to pertorm contracts.
10. Defendant RAUL BORCUT A was an individual who maintained a residence in
the Northern District of

Ilinois. In or about February of20IO, BORCUTA worked and resided

in Afghanistan, where he had been employed by a defense contractor that supported the Unitcd
States's military operations in that country.
11. On or about February 10,2010, CLOSE issued a Statement of

Work which

contracted with BORCUTA and Logistical Operations Worldwide, a fictitious business
association creatcd by BORClHA, to

provide two armored sport utihty vehicles to be used by

local Afghan government otTcials in Farah, Afghanistan.
12. On or about February 19,2010, BORCUT A and CLOSE signed CURl' Contract

Number 20100202171045 (the "Contract"), which incorporated the Statement otWork described

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in paragraph 11 herein and set the contract value at $200,000 (made payable in the equivalent
amount of

the legal currency ofthc Islamic Republic of Afghanistan).
13. On or about February 19,2010, BORCUT A signed and submitted an invoice

which sought a 100% lip front payment (i.c., a payment before contractual performance) of
$200,000 on the contract.
14. On or about February 19,2010, TAYLOR and CLOSE authorized payment of

$200,000 to RAUL BORCUTA and Logistical Operations Worldwide by countersigning thc

invoice described in paragraph 13 even though BORCUTA had not delivered the vehicles
describcd in the Contract.
15. On or about February 28, 2010, the U.S. Army Finance Offce in Kandahar,

Afghanistan paid the invoice described in paragraph 13 herein by sending a wire transfer in the
amount of9,476,000 Afghanis, the cunency of

the Islamic Republic of Afghanistan (equivalent

to $197,217.04), from an account held by the U.S. Treasury at Afghanistan International Dank to

Harris Bank in Naperville, Illinois, in the Northern District of Ilinois. The wire transfer was sent
from Afghanistan to the State of

Ilinois by way of a wire transfer to Commcrz Bank, AG in
New York. The Harris BafÙe aCëOunl that

Germany and Wachovia Bank, N.A. in thc State of

received this wire payment was held by BORCUTA and CI-l.

16. At no time did BORCUTA deliver the vehicles described in thc Contract.

COUNT ONE
18 U.S.c. § 1349

(Cunspiracy)
17. Paragraphs 1 tlnough 16 of this Indictment are re-alleged and incorporated herein
as if sct forth in fulL

18. Bcginning at least as early as in or about October 2009, and continuing through at
least in or about October 2010, in the Northern District of

Ilinois and elsewhere.

4

RAUL BORClJTA, ZACHERY TAYLOR, JARRED CLOSE,
defendants herein, did knowingly and intentionally combine, conspire, and agree with others
known and unknown to the grand jury to commit the following two offenses:
a. Wire Fraud, that is, to devise and intend to devisc a scheme and artificc to
defraud and for obtaining money and propert by means of materially false and fraudulent

pretenses, representations and promises, and material omissions, and for the purpose of executing the scheme and artifice, using wire communications in interstate commerce, in violation of Titlc
18, United States Code, Section 1343.
b. Mail Fraud, that is, to devise and intend to dcvisc a sóemc and artifice to

defraud and for obtaining money and propcrty by

means of materially false and fraudulent

pretenses, representations and promises, and material omissions, and for the purpose of cxecuting

the scheme and aitifiee, using the United States Postal Service and commercial interstate carriers
to send and deliver mail matter, in violation of l' it

Ie 18, United States Codc, Section 1341.

The Purpose and Object ot'the Conspiracy
19. The purpose and object of

the conspiracy was for BORCUTA to:

a. influence TAYLOR and CLOSE to award him the Contract by paying hoth

TAYLOR and CLOSE $10,000 each;
b. influence TAYLOR and CLOSE to authorize payment under the Contract

befote BORCl.T A performed his contractual obligations by paying both TAYLOR and CLOSE
$10,000 each; and
c. steal money from the United States by collccting a $200,000 payment

under the Contract without performing his contractual obligations.

5

Manner and Means
20. The maimer and means by which the defendants sought to accomplish the
purposes and objectives of

the conspiracy include, but arc not limited to, the following:

a. TA YLOR and CLOSE awarded BORCUT A CERP Contract Numbcr

20100202171045, which required BORCUTA to provide two up-armored vehicles in exchange
for $200,000 (made payable in the equivalent amount of the legal currency of

the Islamic

Republic of Afghanistan).

b. BORCUTA, TAYLOR and CLOSE agreed that BORCUTA would pay
TA YLOR and CLOSE $10,000 each to influence them to award BORCUTA CERP Contract

Number 20100202171 045.

c. BORCUTA submitted to TAYLOR and CLOSE an invoicc seeking an up

fron: payment of $200,000 before the vehicles were delivered.

d. TAYLOR and CLOSE acecpted BORCUT A's invoice and authorized the
Kandahar Finance Office of the United States Army to make a wire transfer, in international and

interstatc commerce, in the amount of9,476,000 Afghanis (the cquivalent of$197,2l7.04) from
an account held by the United States Treasury at Afghanistan International Bank to en account at
Harris Bank in Illinois held by BORCUTA and CH.
e. BORCUT A paid TAYLOR and CLOSE $10,000 each to influence them to

make to BORCUTA a $200,000 paymel't under CERP Contract Number 20100202171 045 cvcn

though BORCUTA had not satisfied his contractual obligations.
f. After receiving the proceeds of the wire transfcr, BORCUTA causcd CII

to purchase from a Harris Bank branch in Naperville, l1inois, in the Northern District of l1inois,
two cashier's checks each for $10,000. One of

these $10,000 cashier's checks was ,nade payable

to TA YLOR and the other $10,000 cashier's check was made payable to CLOSE. CH sent the
checks to TA YLOR and CLOSE via United States mail from and within the Northern District of

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Ilinois. CH sent the checks to TAYLOR and CLOSE at the direction of BORCUT A and
transmitted the checks in two separate mailings.

g. At no time did BORCUTA deliver the vehicles described under the
Contract.
All in violation of Title 18, United States

Code, Section 1349.
COUNT TWO

18 U.S.c. § 1343 and 2

(Wire Fraud and Aiding and Abetting)
21. Paragraphs 1 through 16 and 20 of

this Indictment are re-al1eged and incorporated

herein as if set forth in full.

22. Beginning at least as early as in or about October 2009, and continuing through at
leas! iii or about Octobcr 2010, in the Northern District of Ilinois and elsewhere,

RAUL BORCIJTA, JARRED CLOSE, ZACHERY TAYLOR,
defendants herein, did knowingly and inlenlional1y devise and intend to devise a scheme and
artilìce to dcIÌaud and for obtaining money and property by means of material false and

fraudulent pretenses, representations and promises and for the purposc of executing the scheme
to dcfraud, and attempting to do so, knowingly caused to be transmitted, and aided and abetted
the transmission of, hy means of

wire communication in interstate and inten~ational commerce

thc wire transfer described herein.

n. The object of

the scheme and ai1ifice to defraud was for BORCUTA to:

a. influence TAYLOR and CLOSE to award him the Contract by paying both
TA YLOR and CLOSE $10,000 each;

b. influence TAYLOR and CLOSE to authorize payment under the Contract beíore
BORCUTA performed his contractual obligations by paying both l' AYLOR and CLOSE

$10,000 each; and
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". to steal money from the United States by collecting a S200,000 payment undcr the
Contract without performing his contractual obligations.
24. It was part of

the scheme and artifice to defraud that BORCUTA agreed to and did in

fact pay l' AYLOR and CLOSE $10,000 each to award to BORCUT A a PRT contract (CERP
Contract Number 20100202171045) to provide

two up-armored vehicles and to pay the whole

value of

the Contract before the vehicles were dclivered.
25. It was further part of

the scheme and artifice to defraud that on or about February 19,

2010, TAYLOR and CLOSE authorized a wire payment to BORCUTA in the amount of
$200,000 even though BORCUTA had not delivered the two vehicles required by the Contract.
26. On or about Februar 28,2010, in the Northern District of l!inois and elsewhere, for

the purpose of executing the scheme and artifice, and attempting to do so, TAYLOR and CLOSE transmitted and caused to be transmitted by means of wire communications in interstate and

international commerce, a wirc transfer in the amount of $197,217.04, in viclation ofTitlc 18,
United States Code, Sections 1343.

27. At no time did BORCUT A deliver the vehiclcs described under the Contract.

All in violation of Titlel8, United States Code, Sections 1343 and 2.

COUNTS THREE THROUGH FOUR 18 U.S.C. § 1341 and 2 (Mail Fraud and Aiding and Abetting)
28. Paragraphs 1 through 16, 20 and 23-27 ofthe Indictment are re-alleged and
incorporated herein as if set forth in nill.

29. Beginning at least as early as in or about October 2009, and continuing through at
least in or about October 20 1 0, in the Northern District ofIllinois and elsewhere,

RAUL BORCUTA, JARRED CLOSE, ZACHERY TAYLOR,

8

defendants herein, did knowingly and intentionally devise and intend to devise a scheme and
artifice to defraud and for obtaining money and property by means of material false and

fraudulent pretenses, representations and promises and for the purpose of the scheme to defraud,
knowirigly caused to be delivered by the United States mail or by a commercial interstatc carrier
the mail

mattcr described herein.

30. On or about the dates set forth below, in the Northern District of Ilinois and

elsewhere, for the purpose of executing the schemc and artificc, and attempting to do so, the
dcfendants caused CH to place mail

matter in a post offcc and authorized depository for mail

matter, to be sent and delivered by the United States Postal Service, and did knowingly cause
mail matter to be dc1ivered by mail according to the dircction thereon, that is, the payments

identified below, with each mailing constituting a separate violation of Titlc 18, United States
Code, Section 1341.

Count
3

Date
3/9/2010

Description
cashier's check in the amount of$IO,OOO made payable to CLOSE, with the knowledge and approval 01'
A mailing containing a

BORCUTA, for the purpose of influencing CLOSE's oftcial actions and decisions.
4
3/9/20 i 0
A mailing containing a

cashier's check in the amount of$lO,OOO

made payable to TAYLOR, with the knowledge and approval of
BORCUTA, for the purpose of influencing TA YLOR'.s official
L....

actions and decisions.

All in violation of Titlel8, United States Code, Sections 1341 and 2.
COCNTS FIVE AND SIX 18 U.S.C. § 201(b)(l)(A)-(C) (Bribery)
31. Paragraphs 1 through 16,20,23-27, and 30 of

the Indictment are re~aiieged and

incorporated herein as if set forth in fulL.

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32. Beginning at least as early as in or about October 2009, and continuing through at
least in or about October 2010, in the Noiihern District of Ilinois and elsewhcre,
RA.UL BORCUTA,

defendant herein, directly and indirectly, did corruptly give, offer, and promise something of

value to a public offcial, with intent to influence official acts and to induce such public offcial
to do and omit to do acts in violation of

the lawful duty of such offcial; that is, BORCUTA

corruptly gave, offered, and promised the following payments to l' AYLOR and CLOSE in return

for TAYLOR and CLOSE awarding him pRT contract number 20100202171 045 and to pay
BORCUTA 100% of

the Contract value bcfore BORCUT A performed the Contract:

Count
5

Date
3/9/20 i 0

Description
BORCUTA caused CH to mail to CLOSE a payment of $10,000.

6

3/9/2010

BORCUTA caused CII to mail to TAYLOR a payment of $10,000.

All in violation of

Title 18, United States Code, Section 201(b)(1)(A)-(C).

COUNT

SEVEN

18 U.S.c. § 201(b)(2)(A)-(C)

(Bribery)
33. Paragraphs 1 through 16,20,23-27, and 30 ofthe Indictment are re-alleged and
incorporated herein as if set forth in fulL.

34. Beginning at least as early as in or about October 2009, and continuing t'rough at
least in or about October 2010, in the Northern District of

Ilirois and elsewhere,

ZACHERY

TAYLOR,

as a public official, directly and indirectly did corruptly demand, seek, receive, accept, and agrcc
to receive and accept things of value

in return for being influenccd in the performance of olfcial

acts, and in rcturn for being induced to do and omit to do acts in violation of a lawful duty; that

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is, TAYLOR corruptly demanded, sought, received, accepted, and agreed to receive and accepted

$10,000 tram BORCUTA in return for awarding BORCUTA a pRT contract (number
20100202171 045) and authorizing payment of iOO% of

the Contract value bcfore BORCUT A

performed the contract.

All in violation ofTitIe 18, United States Code, Section 201(b)(2)(A)-(C).

COUNT EIGHT
18 IJ.S.c. § 201(b)(2)(A)-(C)

(Bribery)
35. Paragrzphs 1 through 16,20,23-27, and 30 of

the Indictment are re-alleged and

incorporated herein as if set forth in full.

36. Bcginning at least as early as in or a'Jout October 2009, and continuing tlu'ough at
least in or ëbout October 2010, in the Northem Oistric\ of

Ilinois and elsewhere,

JARRED CLOSE,
as a public olfcial, direcCy and indirectly did cDrmp\ly demand, seek, receive, accept, and agree to receive and accept things of value in return for being influenced in the performance of official

acts, and in return for being induced to do and omit to do acts in violation of a lawlul duty; that
is, CLOSE corruptly demanded, sought, received, accepted, and agreed to receive and accepted
$10,000 from BORCUTA in return for awarding BORCUT A a pRT contract (number

20100202171045) and authorizing payment of 100% ofthc contract value before BORCUTA
performed the Contract.

All in violation ofTitIe 18, United States Code, Section 201(b)(2)(A)-(C).

11

COUNT

NINE

18 U.S.c. § 641

(Theft of government funds)
37. Paragraphs 1 through 16, 20, 23-27, and 30 of the Indictment are re-alleged and
incorporated herein as ifset forth in fulL.

38. Beginning at least as early as in or about October 2009, and continuing through at least
in or about October 2010, in the Northern District of

Ilinois and elsewhere,

RAUL BORCUTA,
did knowingly embezzle, steal, purloin, and convert to his use money and things 01' valuc 01' the

United States and a department and agency of the United States, that is, RAUL BORCUT A
knowingly and intentionally collected $197,217.04 from the United States Department 01' Defense

under the Contract to provide two up-armored vehicles when he then aJid there well knew that he did

not deliver the vehicles and had no intention of delivering the vehicles.
All in violation of

TitIc 18, United States Code, Section 641,

FORFEITURE ALLEGA nON
The SPECIAL JULY 2010 GRAND JURY further charges:
39. The allegations in Counts 1 through 8 of

this Indictment are re-alleged and

incorporated by reference for the purpose of alleging that certain property is subject to forfeiture
pursuant 10 Title 18, United States Code, Section 981 (a)(l )(C) and Title 28, United States Code,
Section 2461(c).

40. As a result 01' their violations of Title 18, United States Code, Sections 201, 1341,
1343, and 1349, as alleged in the foregoing Indictment,

RAUL BORCUTA, ZACHERY TAYLOR, JARRED CLOSE,

12

defendants herein, shall forfeit to the United States, pursuant to Title 18, United States Code,

Section, 981(a)(l)(C) and Title 28, United States Code, Section 2461(c), any and all right, title
and interest in property, real and personal, which constitutes and is derived trom proceeds
traceable to the charged offenses.
41. The interests of

the defendants subject to forfeiture pursuant to Title 18, United States
2461(c) include but arc

Code, Section, 981(a)(l)(C) and Title 28, United States Code, Section

not limited to funds in the amount of $197,217.04.
42. If any of

the property subject to forfeiture and describcd abovc, as a result of any act

or omissioL of the defendants:

(a) Cannot be located upon thc 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 d¡vided without

diffculty,
the United States of Americä shäll be entitled to forfeiture of substitute property, under the
provisions ofTitlc 21, United States Code, Section 853(p), as incorporated by Title 28, United

States Code, Section 2461 (c).

All pursuant to Title 18, United States Code, Section 981(a)(1)(C) and Title 28, United
States Code, Section 2461(C).

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DATED: this

day of_.

, 20 i 1.

A

TRUE

BILL:

FOREPERSON OF THE GRAND JURY

LANNY A. BREUER Assislant Attorney General

Brian R. Young Trial Attorney Criminal Division United States Department of Justice

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