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Government Contractor Charged in $2.6 Million Fraud Scheme

Posted by Fay Arfa | Jan 31, 2018 | 0 Comments

Charges were unsealed today against a government contractor following his arrest in St. Louis, Missouri, for his role in allegedly carrying out a $2.6 million scheme to defraud at least 35 subcontractors located across the United States.

Acting Assistant Attorney General John P. Cronan of the Justice Department's Criminal Division, U.S. Attorney McGregor W. Scott of the Eastern District of California, Special Agent in Charge David A. House of the Department of Interior Office of Inspector General's (DOI-OIG) Western Region Office of Investigations, Special Agent in Charge Ray Park of the U.S. Army Criminal Investigation Command's (Army CID) Pacific Fraud Field Office, Special Agent in Charge Sean Ragan of the FBI's Sacramento Division, Director Timothy N. Ries of the Air Force Office of Special Investigations' (Air Force OSI) Office of Procurement Fraud Investigations and Special Agent in Charge Chris Hendrickson of the Defense Criminal Investigative Service's (DCIS) Western Field Office made the announcement.

Chester L. Neal Jr., 43, of Fresno, California, was charged in an indictment filed in the Eastern District of California with two counts of mail fraud.  Neal will have his initial court appearance later today before Magistrate Judge David D. Noce of the Eastern District of Missouri.

According to the indictment, Neal established and controlled several companies through which he secured at least 105 government contracts to provide various goods and services to federal agencies including the Department of Interior, U.S. Army and U.S. Air Force.  The indictment alleges that Neal subcontracted the work to other vendors who provided all of the goods and services to the contracting federal agencies.  Neal allegedly made several misrepresentations in order to induce the subcontractors to perform the contractually required work.  The indictment further alleges that Neal did not pay his subcontractors even though he was paid by the government for his subcontractors' work.  Instead, Neal allegedly kept the money for his personal use.  In total, between July 2008 and December 2017, Neal allegedly defrauded his subcontractors out of at least $2.6 million.

An indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

DOI-OIG, Army CID, the FBI, Air Force OSI and DCIS are investigating this matter.  Trial Attorney Kyle Maurer of the Criminal Division's Fraud Section and Assistant U.S. Attorney Grant Rabenn of the Eastern District of California are prosecuting the case.

Component(s): Criminal DivisionUSAO – California, Eastern

Press Release Number: 18-117 Updated January 30, 2018

Central District of California DOJ / 18-117 / January 30, 2018

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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