Triple the Cost of a Shower Valve: How to Cheat the Navy

(CN) – Public works employee Fernando Barroso Sr. sat down to enter a simple work order. One of the buildings at the Naval Base at Point Mugu had a leaking shower head.

“Send to T and A Services 1/22/14,” Barroso wrote, adding his initials.
 
A few days later, a different company sent T&A an invoice for parts and labor totaling $543.38. Barroso carefully whited-out the amounts on the invoice, replacing the total figure with $1,590. He then prepared an estimate from T&A for the replacement shower valve. The cost? $1,590.

That replacement shower head would cost nearly three times what the other company had actually charged to perform the work. But Barroso owned a majority stake in T&A Services and Supplies, which he had bought in 2013. And he was on the take.

Such was a scheme Barroso perpetuated for six years, alongside his partner, Ventura County businessman Theodore Bauer.

The pair met in 2008. By then, Barroso, a 58 year-old civilian from Oxnard, was “master scheduler” for the Naval Base Ventura County. He was in charge of approving purchases, service contracts and vendor payments for the bases’ three facilities at Point Mugu, Port Hueneme and San Nicolas Island. It was a job he would hold for 22 years, until he was caught by the IRS.

Together, Barroso and Bauer launched a six-year scheme that resulted in Barroso stealing more than $1.2 million by approving phony invoices for work that was never performed.

Bauer operated Gold Coast Supply, Western Military Supply.com and MNC Facility Services, all U.S. Navy vendors.

According to court documents, Barroso would approve work orders from Bauer’s companies using the government purchase cards of buyers without their knowledge of what the transactions were. He would enter requisition orders into the public works department’s procurement database and then direct the buyers to backdate their signatures on the orders to make it appear that the requisition orders had been authorized.

Bauers’ companies would also issue invoices requesting the U.S. Navy pay for non-existent services and parts, on which Barroso would sign “received and accepted.”

Barroso and Bauer would then split the proceeds. Prior to Sept. 14, 2011, Bauer paid Barroso his half in cash, a figure that amounted to more than $375,000, according to federal officials.

After that date, Bauer began paying Barroso via checks that he made out to Barroso’s new company F. Barroso & Sons.

In December 2013, Bauer also began paying Barroso via checks to T&A Carpet Cleaning Technology Advance Inc., also known as T&A Services & Supplies, a maintenance company in which Barroso owned an 85 percent stake.

Bauer paid Barroso $856,350 in checks alone, prosecutors say.

(Mass Communication Specialist 2nd Class Sean M. Castellano/U.S. Navy via AP)

Barroso was arrested on Jan. 3, 2019. As part of his plea agreement, Barroso also admitted to filing false tax returns for both himself and F. Barroso & Sons and intentionally failing to inform his tax preparer about the $95,200 he received from Bauer, instead calling it a loan. On his personal return for 2011, Barroso reported his government salary of $83,000, but didn’t report the Bauer checks as income. He also claimed $331,225 worth of fictitious deductions on his 2012 tax returns, according to his plea agreement.

Barroso will be sentenced on June 3 for one count of conspiracy and one count of making out a false federal income tax return and could spend eight years in federal prison. He also faces a fine of $500,000 and $951,549 in restitution fees.

Bauer also pleaded guilty last November for conspiracy to commit bribery. He will be sentenced on that count on June 10. Bauer also awaits sentencing for to conspiracy to commit bribery.

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