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01/17/2012

Former contractor pleads guilty to taking part in fraud against ICE

Scheme involved more than $50,000 obtained through travel vouchers

WASHINGTON — A contractor who previously conducted work for U.S. Immigration and Customs Enforcement (ICE), pleaded guilty to taking part in a scheme in which he fraudulently received more than $50,000 in government money.

Stephen E. Henderson, 61, of Asheville, N.C., pleaded guilty in the U.S. District Court for the District of Columbia to a charge of conversion of government money. The Honorable Amy Berman Jackson scheduled a status hearing for March 6, 2012; no sentencing date was set. Under federal guidelines, Henderson faces a likely sentence of up to a year in prison. As part of his plea agreement, Henderson agreed to forfeiture of the money that he wrongfully obtained.

The plea was announced by U.S. Attorney Ronald C. Machen Jr., District of Columbia; James Izzard Jr., special agent in charge of the DHS Office of Inspector General; James W. McJunkin, assistant director in charge of the FBI's Washington Field Office; and Paul E. Layman, deputy division director of ICE's Office of Professional Responsibility.

The case remains under investigation. In a related matter, William J. Korn, Jr., a former Intelligence Research Specialist with DHS, pled guilty in the U.S. District Court for the District of Columbia to a charge of conversion of government money. Korn, 53, of Tucson, Ariz., is awaiting sentencing in the case, which involves another $50,832 in government money.

According to the government's evidence, with which Henderson agreed, at all relevant times, Henderson was employed as a senior lead intelligence analyst for a private company, and did work in that position as a contractor for DHS/ICE/ Homeland Security Investigations/Office of Intelligence. Henderson's permanent residence was in Tucson. His official duty location was in Tucson until August 2009, when his company changed it to Fairfax, Va.

The charge against Henderson stems from Henderson's dealings with two other individuals who worked for ICE, both based in Washington, D.C. One was a supervisor and the other was the supervisor's assistant.

For much of this scheme, Henderson was on temporary assignment in Washington, from his base in Tucson. When a U.S. government employee or contractor is officially on duty in a location other than the employee's permanent duty station, that situation is referred to as Temporary Duty (TDY) status. While on TDY, the employee or contractor is entitled to a per diem allowance for lodging, meals and other expenses. The scheme involved the improper use of TDY money.

From November 2007 through August 2009, Henderson was officially on TDY status in Washington at the request of the ICE supervisor. The supervisor had Henderson traveling to ICE offices around the United States. While Henderson was on TDY status, he lived at an apartment and then a house rented or leased by the ICE supervisor and others.

Initially Henderson's living arrangement was rent-free, but eventually he paid $500 a month to either the ICE supervisor or the supervisor's assistant. Henderson paid this monthly amount even when he was on travel to other ICE offices.

In late May and early of June 2008, while Henderson was on TDY status in Washington, the supervisor told him to put in a travel advance and that they could then use those funds to buy a boat. Henderson did as he was requested, obtaining a travel advance of $6,000. He then transferred $5,000 to the supervisor's bank account.

The supervisor carried through on the plan to use the money to buy a boat. Henderson went with the supervisor's assistant to purchase the craft. The boat was initially registered in the name of Henderson, at the request of the supervisor. Subsequently, the supervisor's assistant sent documents to Henderson that were used to transfer the title of the boat to the supervisor.

After the purchase of the boat, the assistant, at the direction of the supervisor, told Henderson to file a 30-day travel voucher to fraudulently include lodging expenses so that he could recover the money he used to purchase the boat. The assistant created the voucher for Henderson and Henderson signed it. The assistant provided Henderson with a fraudulent hotel receipt to submit with the travel voucher, which Henderson included. Henderson submitted his vouchers to the company for which he worked, and the expenses were then charged by the company to the government under the contract it had with ICE.

In October 2008, Henderson's company changed to a new travel management system which required receipts. Thereafter, the assistant provided Henderson with fraudulent hotel receipts to submit with his voucher for travel to Phoenix, Ariz. and Washington.

The supervisor subsequently sent Henderson on trips to ICE offices around the country, primarily in the southern and southwestern areas of the United States, and Henderson submitted fraudulent vouchers showing lodging expenses that he did not incur. The receipts for these expenses were provided to Henderson by the supervisor's assistant. Henderson kicked back a significant amount of the money he received from these fraudulent claims to the supervisor and the assistant.

In October 2009, the assistant told Henderson that the supervisor needed a significant amount of money, and suggested Henderson submit a fraudulent travel advance. Henderson obtained the travel advance, and gave approximately $4,299 to the assistant. Henderson thereafter justified this advance through fraudulent travel vouchers.

In August 2009, because Henderson's company had transferred his official duty location to Fairfax, Va., the supervisor sent him to Tucson on TDY status, so that Henderson, in part, could continue to submit fraudulent claims. The assistant told Henderson he should not go into the ICE office when he was in Tucson, but rather to work from home, which he did.

As a result of the submission of the fraudulent advances and vouchers, Henderson, aided and abetted by the supervisor and supervisor's assistant, received from ICE approximately $54,387 more than that to which he was entitled during the period of July 2008 and October 2010. Henderson contends that he paid a significant amount of the money he fraudulently received as part of this scheme to the two individuals.

This case was investigated by the Office of Inspector General for the Department of Homeland Security, the FBI's Washington Field Office, and ICE's Office of Professional Responsibility, Special Investigation Unit.

In announcing today's guilty plea, U.S. Attorney Machen, Special Agent in Charge Izzard, Assistant Director McJunkin and Deputy Division Director Layman praised the investigative agents from the respective agencies for their hard work in this matter. They also acknowledged the efforts of Legal Assistant Jared Forney, as well as Assistant U.S. Attorneys Daniel Butler and Allison Barlotta, who are handling this prosecution, and Assistant U.S. Attorney Scott Sroka, who is handling the asset forfeiture.