DISTRICT OF OREGON
PORTLAND DIVISION
1. The Oregon National Guard (ONG), located in the District of Oregon, is a federally
mandated and equipped military organization under the civilian direction of the Oregon Military
Department, with the Governor of Oregon as its Commander-in-Chief. It responds to state and
national emergencies, military conflicts and natural disasters, and conducts search and rescue
operations.
2. Beginning in 1998 and at all times relevant to this Indictment, the ONG operated and
maintained the Oregon Sustainment Maintenance Site (OSMS) at Camp Withycombe, an Oregon
Military Department installation. OSMS supports readiness and training of the United States
Defense and fielding those items to other military bases or installations or, if necessary, re-
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deploys the items in the event of an emergency or declaration of war. The Power Division at
OSMS was responsible to rebuild and repair small and large engines, generators, tires and
various other projects. At all times relevant to this Indictment and through 2015, OSMS was the
only maintenance site in the United States capable of repairing and rebuilding certain engines in
3. Funds for parts and labor of the Power Division were primarily provided by the U.S.
Program (NMP) and the RESET Program (RESET). Under both the NMP and RESET for each
Fiscal Year (FY) during the relevant time period, CECOM authorized the amount of work (in
Request (MIPR).
4. Under the RESET, during the course of each FY, the Power Division sought
reimbursement for work performed and/or advances for work in process, that is, work that had
begun but had not been completed, from CECOM using a Request for Billing Against a MIPR
(Request). Attached to each Request was a list of the Power Division work order numbers, the
cost of the work performed with each work order, and, ifthe work had begun but was not
complete, the date the work would be complete. Upon receipt and approval, CECOM caused the
5. Under each FY MIPR, when the Power Division began work on a generator, engine or
other item, the Power Division generated a work order; each work order had an assigned number.
Each work order specified the amount for parts and the amount of the labor to perform the work.
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A work order number was required to seek reimbursement through a Request or otherwise for
work performed or to obtain an advance on work that was in process. Under the NMP and the
RESET once work was completed, the Power Division closed the work order and certified that
the work had been performed on the item. Under the NMP, once the work order was closed, the
work could be reimbursed by CECOM. Under both programs, once the work order was closed,
the item was listed in the Power Division's inventory as available for shipment to other military
bases or installations by CECOM. As part of its internal controls, CECOM was required to
confirm that work was performed, or had been completed on prior advances, by reviewing work
orders and other information generated by closing the work order, before payment could be
wired to OSMS.
(CAPUTO), was the Program Manager for the Power Division of OSMS. As part of his
responsibilities, CAPUTO directed, controlled and supervised the work performed at the Power
Division and the submission of claims to CECOM on behalf of the Power Division. CAPUTO
and other Power Division employees at CAPUTO's direction, electronically signed the Requests
and certified that all work was performed or was "in-process" and completed as outlined in the
work order and consistent with the MIPR, that payment was due and that such work had not been
previously requested. In the majority of instances during the time relevant to this Indictment,
CAPUTO sought reimbursement for work that was already performed and represented to
CECOM through the Requests and closed work orders that work was complete and ready to be
shipped to a military base or installation. In a few instances, CAPUTO sought advancement for
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work that was in-process, that was purportedly already started, and represented that the work
COUNTS 1-4
(Wire Fraud)
(18 u.s.c. § 1343)
7. Paragraphs one through six above are realleged and incorporated by reference. Beginning
in or about 2012, and continuing through in or about November 2014, CAPUTO, devised and
intended to devise a material scheme to defraud the United States and to obtain money and
property by means of materially false and fraudulent pretenses, representations and promises.
8. It was part of the scheme and artifice to defraud that CAPUTO sought reimbursement
and funds from CECOM for parts and labor to repair and rebuild engines, generators and other
parts that he knew were not completed and/or would not be completed by the Power Division.
9. CAPUTO knowingly and intentionally made the following materially false statements
a. that specific work had been completed and parts for the work were purchased
consistent with the MIPR and work orders, when in fact, CAPUTO knew that the
work in the Requests and work orders had not been completed;
b. that specific work was in process and would be performed and parts would be
purchased consistent with the MIPR and work orders, when in fact, CAPUTO
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knew that the work listed in the Requests and work orders was not in process and
c. that engines, generators and other items had been rebuilt or repaired as specified
in the MIPR and therefore, were available for shipment by CECOM to other
military bases or installations, when in fact, CAPUTO knew that the engines,
generators and other items had not been rebuilt or repaired as specified in the
MIPR and, as a result, were not available for shipment by CECOM to other
d. that all work on prior MIPRs were complete and all funds previously paid against
a Request or work order were used as specified in the MIPRs, Requests and work
orders.
10. It was part of the scheme and artifice to defraud that CAPUTO and other Power Division
employees at CAPUTO's direction, prepared false work orders to support Requests to CECOM.
CAPUTO knew that the work represented in the work orders had not been performed and/or
11. It was further part of the scheme and artifice to defraud that CAPUTO and other Power
Division employees at CAPUTO's direction, closed work orders to represent that work had been
completed and that the items were available in the Power Division's inventory for CECOM to
ship to other military bases or installations. CAPUTO knew that the work represented in the
closed work orders had not been performed and that the items represented in the Power
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Division's inventory as a result of the closed work orders, were not available for shipment by
CECOM.
12. It was further part of the scheme, that in order to conceal CAPUTO's misrepresentations,
CAPUTO directed employees of the OSMS Power Division to use their government credit cards
to purchase engines, generators or other parts necessary to fulfill requests from other military
bases or installations for items that CAPUTO, or other Power Division employees at his
direction, had certified had been repaired by the Power Division and previously billed to and
reimbursed by CECOM.
13. It was further part of the scheme and artifice to defraud that during FY 2013 CAPUTO
and other Power Division employees at CAPUTO's direction, closed hundreds of work orders
before work was complete on engines and generators, including on the L-70 Yanmar engines.
Despite the fact the work was not complete and would not be completed, CAPUTO had received
and sought reimbursement for these items through closed work orders and Requests to CECOM.
CAPUTO did not inform CECOM that work previously reimbursed or paid for in-process had
not been performed. The items on these closed work orders continued to be listed on the Power
14. It was part of the scheme and artifice to defraud that in FY 2014, CAPUTO billed
CECOM for the repair and rebuilding of John Deere Diesel Engines. More than 60 of the
engines had previously been repaired, rebuilt and billed to CECOM by CAPUTO during FY
2012 and FY 2013. It was further part of the scheme and artifice to defraud that CAPUTO and
other Power Division employees at CAPUTO's direction, instructed employees of the OSMS
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Power Division to remove serial numbers and identifying engine plates in order to conceal that
the John Deere Diesel Engines had been previously repaired and billed to CECOM.
15. During the course of CAPUTO's scheme and artifice to defraud, CAPUTO sought
reimbursement for repairing and rebuilding more than 1,380 engines, generators and other parts
that in fact, had not been repaired or rebuilt and were not available for service by the military.
Over the course of CAPUTO's scheme and artifice to defraud, CAPUTO billed or caused to be
billed more than $6,400,000 for work that was not performed.
16. On or about the dates listed below, in the District of Oregon and elsewhere, CAPUTO
having knowingly devised and intended to devise the aforementioned material scheme and
artifice to defraud, and to obtain money and property by means of materially false and fraudulent
pretenses, representations and promises, and through omissions of material fact, for the purpose
of executing and attempting to execute the scheme and artifice, did knowingly cause to be
signals, and sounds, the following transfers of money via interstate wire:
Ill
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COUNTS
(False Statement in a Document)
(18 U.S.C. § 1001(a)(3))
Paragraphs one through sixteen above are realleged and incorporated by reference. On or
about June 2, 2014, in the District of Oregon, CAPUTO, did willfully and knowingly make and
use a false writing and document to CECOM, knowing the same to contain a materially false,
fictitious, and fraudulent statement and entry in a matter within the jurisdiction of the executive
branch of the Government of the United States, by preparing a work order and run test data
indicating that work had been performed on a John Deere Diesel Engine bearing the serial
number 780656, when in fact, CAPUTO knew it was false and the work performed was on a
John Deere Diesel Engine, serial number 240509. CAPUTO instructed employees to remove the
original serial number from the John Deere Diesel Engine and replace it with a different one to
conceal that CAPUTO had billed CECOM for the same work in FY 2012 and FY2013.
FORFEITURE ALLEGATIONS
1. The allegations contained in Counts One through Five ofthis Indictment are
realleged and incorporated by reference for the purpose of alleging forfeitures pursuant to Title
2. Upon conviction of the offenses in violation of Title 18, United States Code,
Sections 1341 and 1001 set forth in Counts One through Five of this Indictment, the
America, pursuant to Title 18, United States Code, Section 982(a)(3), any property, real or
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personal, which represents or is traceable to the gross receipts obtained, directly or indirectly, as
of CAPUTO:
without difficulty,
the United States of America shall be entitled to forfeiture of substitute property pursuant to Title
21, United States Code, Section 853(p), as incorporated by Title 18, United States Code, Section
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
Ill
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OFFICIATING FOREPERSON
Presented by:
BILLY J. WILLIAMS
United States Attorney
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