Office of Public Affairs
October 20, 2017
The indictment alleges that Kenneth Keyes, a former facility manager at Sierra Army Depot (SIAD), and Leroy Weber, the owner of a roofing company, participated in a conspiracy to defraud the United States from as early as February 2012, and continuing through at least July 23, 2013, by obstructing the lawful functions of the United States Army through deceitful or dishonest means.
“Yesterday’s indictment demonstrates the Antitrust Division’s commitment to pursuing individuals who seek to enrich themselves by misusing federal programs at the expense of taxpayers,” said Assistant Attorney Makan Delrahim of the Justice Department’s Antitrust Division.
SIAD is a United States Army facility located in Northern California. In 2012, SIAD earmarked $40 million for construction and renovation projects at its site using contractors who qualified under the Small Business Administration’s 8(a) Development Program. The program provides assistance and benefits to small businesses owned and controlled by socially and economically disadvantaged individuals.
The indictment alleges that Keyes, Weber, and other unidentified co-conspirators:
- Recruited eligible 8(a) contractors to work as primary contractors at SIAD;
- Represented to those contractors that Weber controlled the work and allocation of SIAD contract awards;
- Caused prime contracts to be assigned to selected 8(a) contractors;
- Used proprietary government pricing information to inflate contract prices for the SIAD contracts;
- Required selected 8(a) contractors to award work to companies owned or controlled by Weber; and
- Required a contractor to pay Weber in exchange for being awarded certain subcontracts by 8(a) contractors.
The indictment also alleges that Weber caused a company under his control to issue weekly paychecks to a relative of Keyes, and himself caused $10,000 to be paid directly to Keyes.
The purpose of this conspiracy was to enable Keyes and Weber to unjustly enrich themselves and their family members by diverting government funds intended to rebuild and repair the SIAD Army facility to themselves and their companies.
An indictment merely alleges that crimes have been committed and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. Weber and Keyes each face a maximum penalty of 5 years in prison and a fine of $250,000.
The charges are the result of an ongoing federal antitrust investigation handled by the Department of Justice Antitrust Division’s San Francisco Office with assistance from the U.S. Small Business Administration Office of Inspector General, the U.S. Army Criminal Investigation Command, and the General Services Administration Office of Inspector General. Anyone with information concerning the conspiracy should contact the Antitrust Division’s San Francisco Office at 415-934-5300.
Source: U.S. Department of Justice press release.