Fourth Circuit Affirms 105 Year Sentence For DOD Fraud
On November 29, 2012, the U.S. Court of Appeals for the Fourth Circuit affirmed the conviction of Roger L. Day, Jr., who was sentenced to 105 years imprisonment for a multi-million dollar scheme to defraud the U.S. Department of Defense. Following his jury trial in the Eastern District of Virginia, Day was convicted of orchestrating a scheme where he and co-conspirators created false companies to bid on parts-supply contracts for the Defense Logistics Agency, a subsidiary of DOD responsible for parts acquisition for the military. Under the guise of the false companies, Day and his co-conspirators would then use software designed by Day to allow bidding en masse on low-dollar value DLA parts contracts.
After being awarded the contracts, the conspirators shipped inexpensive and non-conforming parts to DLA with the expectation that the government could not inspect each and every part. Very often, DLA would not return non-conforming parts and would pay the full dollar value of the contract, although the company would be debarred from future DLA contracts. However, the conspirators would discard the debarred company and create another false company to replace it. The conspiracy spanned three years and involved 987 DLA contracts valued at $8.67 million.
On appeal, Day challenged his 105 year sentence which resulted from enhancements due to his attempt to bribe officials to escape from custody, a subsequent escape attempt, and an attempt to enlist Mexican cartel members to attack his prison van to permit him to escape. Day also challenged as unreasonable the trial court’s decision to impose a $3 million fine, over $6 million in restitution, and forfeiture award of over $2 million, plus, in gold and vehicles. The Fourth Circuit, however, found these arguments to be without merit and affirmed the judgment of the trial court. The complete decision in United States v. Day, No. 11-5218 (4th Cir. Nov. 29, 2012) can be found here.