Federal authorities are investigating defense contractor Frank Rafaraci on suspicion that he delivered cash bribes and overcharged the U.S. Navy by at least $50 million to service its ships in foreign ports, according to court records that were recently unsealed, The Washington Post has reported.
The Justice Department is trying to extradite Rafaraci, who is chief executive of Multinational Logistics Services (MLS) and a dual U.S.-Italian citizen, from Malta, where he was arrested last week after an international manhunt.
Since 2010, the Navy and federal agencies have awarded MLS about $1.3 billion in contracts to resupply and refuel U.S. warships in several regions, including the Middle East and Asia.
According to an arrest warrant unsealed last week in U.S. District Court in Washington, Rafaraci, who splits his time between the United Arab Emirates and Sicily, and MLS defrauded the Navy of at least $50 million by inflating invoices for port services over a seven-year period starting in 2011.
Lt. Andrew DeGarmo, a Navy spokesman, told The Hill that "agents with NCIS and Defense Criminal Investigative Services first uncovered the alleged wrongdoing. They have been actively coordinating with other law enforcement authorities around the globe.”
The arrest warrant alleges that Rafaraci handed over an envelope with $20,000 in cash to an unnamed U.S. Navy official at the Diplomat Hotel in Manama, Bahrain, in 2015 and told him to "keep up the good work." Rafaraci also allegedly gave the official another envelope with $13,500 three years later at a Miami hotel.
Although the Navy official remains anonymous, the Post said that court papers stated that he pleaded guilty in June to charges of bribery in U.S. District Court in June and has become a witness for the government.
The incident is reminiscent of the 2013 "Fat Leonard" scandal in which defense contractor Leonard Glenn Francis pleaded guilty to overcharging the Navy for port services and bribing officials with money, prostitutes, meals and favors.
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