Pentagon pays $998,798 to ship two 19-cent washers

The U.S. Pentagon paid 998,798 U.S. dollars to purchase two 19-cent washers as part of a fraudulent shipping costs scheme that garnered a small South Carolina parts supplier about 20.5 million dollars during six years. (File Photo)

    The two washers were shipped from South Carolina to a U.S. Army base in Texas, U.S. officials said.

    The company also billed and was paid 455,009 dollars to ship three machine screws costing 1.31 dollars each to Marines in Habbaniyah, Iraq, and 293,451 dollars to ship an 89-cent split washer to Patrick Air Force Base in Cape Canaveral, Florida, Pentagon records show.

    The twin-sister owners of C&D Distributors in Lexington, South Carolina exploited a flaw in an automated Defense Department purchasing system: bills for shipping to combat areas or U.S. bases that were labeled "priority" were usually paid automatically, said Cynthia Stroot, a Pentagon investigator.

    "The majority, if not all of these parts, were going to high-priority, conflict areas -- that's why they got paid," Stroot said. If the item was earmarked "priority," destined for the military in Iraq, Afghanistan or certain other locations, "there was no oversight."

    The scheme was discovered in September after a purchasing agent noticed a 969,000 dollar billing for shipping two more 19-cent washers. That order was rejected and a review found the 998,798 dollar payment earlier that month for shipping two 19-cent washers to Fort Bliss, Texas, Stroot said.

    C&D and two of its officials were barred in December from receiving federal contracts. On Aug. 16, a federal judge in Columbia, South Carolina, accepted the guilty plea of the company and one sister, Charlene Corley, to one count of conspiracy to commit wire fraud and one count of conspiracy to launder money, Assistant U.S. Attorney Kevin McDonald said.

    Corley, 46, was fined 750,000 dollars. She faces a maximum prison sentence of 20 years on each count and will be sentenced soon, McDonald said in a telephone interview from Columbia. Stroot said her sibling died last year.

    (Agencies)