Saturday, March 10, 2007
Guilty Plea In LANL Fraud Case
By Martin Salazar, Journal Staff Writer
A former Los Alamos National Laboratory purchasing officer caught stealing more than $55,000 from the lab in 2005 pleaded guilty in federal court Friday.
Dolores Mae Arreola, a 26-year lab veteran fired in July 2005 after the embezzlement scheme was uncovered, faces up to 20 years in federal prison and hundreds of thousands in fines.
The U.S. Attorney's Office, however, has agreed to recommend that Arreola be sentenced at the lowest end of the sentencing guideline range.
Arreola pleaded guilty to one count of making false statements or entries, one count of theft or embezzlement of public money and one count of making a false, fictitious or fraudulent claim.
As part of her plea, Arreola has also agreed to forfeit a 2000 Ford Mustang, a 2000 Toyota Tacoma truck and $20,000 she acquired through the scam.
A sentencing hearing has yet to be scheduled in the case.
"I recognize and accept responsibility for my criminal conduct," says the plea agreement signed by Arreola.
Arreola also admitted a detailed set of facts about how she pulled off the scheme and what she did with the money.
According to the plea agreement:
Arreola worked as a buyer for the lab and was responsible for processing purchase requests for materials and services needed by lab personnel to carry out their duties.
As a buyer for the lab, she was allowed to make purchases for goods and services costing up to $100,000 without supervisory approval.
At the same time that she was executing her scheme, Arreola was president of the Santo Domingo de Cundiyo Heirs' Association, a land grant heirs group. The organization reportedly seeks recognition of land grant rights in the Cundiyo area, about 20 miles north of Santa Fe.
As president of the group, Arreola had signatory authority on the organization's Del Norte Credit Union account.
On Feb. 22, 2005, she entered false data into the lab's computerized vendor system to make it appear as if the Santo Domingo de Cundiyo Heirs' Association were one of the lab's legitimate vendors.
The same day she activated the organization as a vendor, she submitted a fictitious purchase order for the organization to construct and supply the lab with various fictitious items for a purchase price of $19,845. Arreola authorized advance payment on the order and asked the accounts payable department to notify her when the check was ready so she could pick it up. She picked up the check on Feb. 24, 2005, and deposited it into the organization's bank account. She then withdrew the money.
On May 9, 2005, Arreola prepared a second fictitious purchase order. The following day she picked up the $15,644 check made out to her organization. She deposited it into the organization's account and then withdrew the money.
Arreola used part of the proceeds from those two checks to buy the Mustang and the Tacoma truck.
On June 7, 2005, Arreola processed another fraudulent purchase order for $20,000. She picked up the check from the accounts payable department on June 8, 2005, and deposited it into her organization's account.
Before Arreola could pull the $20,000 out of the account, lab officials discovered what had been occurring, and the bank froze the account.
Arreola isn't the first lab employee to plead guilty to a procurement scam.
Peter Bussolini and Scott Alexander were accused of illegally buying more than $399,000 worth of hunting equipment, outdoor gear and television sets on a LANL account. The scandal, which occurred five years ago, landed the two men behind bars and drew the ire of Congress.
The fact is that the major dollar volume of procurement fraud is committed by the Buyers. They have the greatest opportunity.