ALBANY, GA (WALB) - Federal prosecutors continue to investigate corruption and theft from the Marine Corps Logistics Base after two more guilty pleas Wednesday.
Wednesday two former M-C-L-B officials pleaded guilty to bribery of a public official.
They admitted their part in a scheme to funnel millions of dollars worth of base projects to a yet unnamed Albany trucking company.
This story is important to everyone, because it's our U.S. tax dollars that were being looted, and sources are telling WALB News Ten that tens of millions of dollars were stolen in this scheme. Investigators say be assured, more arrests are coming.
48 year old Mitchell Potts and 35 year old Jeff Philpot, both from Sylvester, plead guilty this morning to bribery of a public official. Potts was the Supervisor of the Traffic Office for the Defense Logistics Agency at the Albany Marine Base. Philpot was the Lead Transportation Assistant. They were in charge of shipping freight in and out of the Base, and admitted Wednesday they took hundreds of thousands of dollars in bribes to funnel business to an Albany trucking company owned by a life long friend to the two.
Potts' Attorney Phil Cannon said "He was friends with one of the main people and has been friends with him since they were one years old. And my client ended up agreeing to work with the gentleman when he just frankly should not have done it. And he's accepted responsibility for his decisions and his actions."
The bribery started with a $200 gift card in January 2008. Philpot ended up admitting in the next three years to receiving $523,000 in cash. Some of the money paid for rare coins Philpot liked to order on line, as well as a vintage Trans Am sportscar, a jukebox, and rare Beatles memorabilia.
Potts admits taking $209,000 in kickbacks, including his wife selling their home to the trucking company owner and still being allowed to live there for free.
Government prosecutors did not name the trucking company or it's owner. In the pleas calling him "Person A" and his trucking firm "Company A." But Philpot and Potts admitted by delaying shipments, short loading trucks, and even writing up ghost shipments, they funneled tens of millions of dollars in fraudulent shipping payments to "person A."
U.S. Attorney Michael Moore said in a statement "I have no tolerance for this type of corruption and theft, and my office will continue to investigate this type of criminal activity, plucking bad apples from the barrel whenever we find one."
Now as part of their plea agreement, Potts and Philpot agreed to fully cooperate with federal investigators, as they continue with this fraud investigation.
Cannon said "There are several people in the community that this investigation will end up touching and reaching out to."
Potts and Philpot each could face a maximum penalty of 15 years in prison and a fine of a quarter million dollars and restitution. Their cooperation will determine how long a prison sentence they serve.
Potts and Philpot admitted they were paid five or six thousand dollars a week in cash in their offices at the base. So even though we don't know "person A's" name yet, we do know he was someone with access on the base and in the top traffic offices. Sources tell me this theft of government money reached into the high tens of millions of dollars. And at a time of tax increases and government employees being furloughed, it really hits home for all of us.
Potts and Philpot are scheduled to be sentenced August 15th.
Base officials would not comment on the pleas, saying the Justice Department is in charge.
Here is a news release from the Unites States Attorney-
GEORGIA MEN PLEAD GUILTY TO RECEIVING BRIBES IN TRANSPORTATION SCHEME AT LOCAL MILITARY BASE
WASHINGTON – Two former employees at the Marine Corps Logistics Base Albany (MCLB-Albany) have pleaded guilty to receiving bribes related to a scheme to funnel freight hauling business to a local transportation company resulting in the loss of millions of dollars to the United States government, announced Acting Assistant Attorney General Mythili Raman of the Justice Department's Criminal Division and U.S. Attorney Michael J. Moore for the Middle District of Georgia.
Mitchell D. Potts, 48, and Jeffrey S. Philpot, 35, both of Sylvester, Ga., each pleaded guilty today before U.S. District Judge W. Louis Sands in the Middle District of Georgia to one count of bribery of a public official.
During their guilty pleas, Potts, the former Traffic Office Supervisor for the Defense Logistics Agency (DLA) at MCLB-Albany, and Philpot, the former Lead Transportation Assistant in the Traffic Office, admitted to participating in a scheme whereby Potts and Philpot assisted Person A, the owner of several local commercial trucking companies, in obtaining trucking business from the DLA in exchange for the payment of cash and other things of value.
Both defendants admitted that they took a variety of steps designed to push business to Person A and his companies, including: 1) delaying shipments for a period of hours or days, thereby reducing the time available to fulfill the shipping request and assuring that it would be awarded to a local trucking company, usually one owned by Person A; 2) "short loading" shipments awarded to Person A's companies so that it would appear to require more trucks than necessary to move the subject freight, resulting in additional loads being awarded to Person A's companies; 3) indicating that removable gooseneck (RGN) trailers were required for shipments, which resulted in many loads being directed to Person A's companies because they always had RGNs available; and 4) creating "ghost shipments" where Person A billed the DLA for shipments that were never made. Both Potts and Philpot admitted that their actions led to millions of dollars of overcharges to the government.
Potts and Philpot admitted that they received cash payments from Person A when he visited the traffic office, sometimes multiple times per week. They also admitted receiving lunches provided by Person A several times a week during the relevant period and that they also received gift cards and other things of value.
Potts admitted receiving approximately $209,000 in kickbacks from Person A during the roughly three-year scheme. Philpot admitted receiving approximately $523,000 in cash and other things of value from Person A during the same period.
At sentencing, Potts and Philpot each face a maximum penalty of 15 years in prison and a fine of not more than twice the pecuniary loss to the government. As part of their plea agreements with the United States, both Potts and Philpot have agreed to forfeit the bribe proceeds they received from the scheme, as well as to pay full restitution to the Department of Defense. Sentencing is scheduled for Aug. 15, 2013.
"Not only were Mr. Potts and Mr. Philpot lining their pockets with bribe money, they were stealing from the American people. I have no tolerance for this type of corruption and theft, and my office will continue to investigate this type of criminal activity, plucking bad apples from the barrel whenever we find one," said United States Attorney Michael Moore.
The case is being investigated by the Naval Criminal Investigative Service, with assistance from the Dougherty County District Attorney's Office Economic Crime Unit, the Defense Criminal Investigative Service, and the Defense Logistics Agency Office of the Inspector General.
The case is being prosecuted by Trial Attorneys Richard B. Evans and J.P. Cooney of the Criminal Division's Public Integrity Section and Assistant U.S. Attorney K. Alan Dasher of the Middle District of Georgia.