Seven Sentenced for Defense Contract Fraud

SAN DIEGO (CN) - Four Navy officers and three defense contractors were sentenced Tuesday for multimillion-dollar purchasing order frauds at Naval Air Station North Island, Coronado, federal prosecutors said.

All seven pleaded guilty on March 28.

The defense contractors paid the Navy officers more than $1 million in cash and gifts, including "checks, retail gift cards, flat screen television sets, luxury massage chairs, home appliances, bicycles costing thousands of dollars, model airplanes, and home remodeling services," the U.S. Attorney's Office said in a statement. "In return, the Navy officials placed millions of dollars in fraudulent orders with the defense contractors."

The Navy officers sentenced, and their terms, were Donald Vangundy, 54, of Chula Vista, 41 months; Kiet Luc, 53, of San Diego, 30 months; Brian Delaney, 55, of La Mesa, 5 years of probation, 30 consecutive weekends of it in jail; and David Lindsay, 57, of San Diego, the same terms as Delaney.

The contractors were all sentenced to 18 months. They are John Newman, 51, of Poway; Michael Graven, 43, of Carlsbad; and Paul Grubiss, 39, of Wickliffe, Ohio.

All seven pleaded guilty to conspiring to commit wire fraud.

Vangundy and Grubiss also pleaded guilty to conspiring to commit bribery. And Vangundy, Luc, and Graven pleaded guilty to filing false tax returns.

Read the Top 8

Sign up for the Top 8, a roundup of the day's top stories delivered directly to your inbox Monday through Friday.

Email *

Submit