CONCORD, N.H., Jan. 3 2004 – LAWFUEL – Best for law news – A Property and Procurement Administrator for the Clerk of the Court for the U.S. District Court for the
District of Massachusetts pleaded guilty today to charges of conspiracy to
defraud the United States, embezzlement, bribery and filing false tax returns.
United States Attorney Michael J. Sullivan; Joseph A. Galasso, Special
Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation;
and Kenneth W. Kaiser, Special Agent in Charge of the Federal Bureau of
Investigation in New England, announced today that TIMOTHY P. SCHROEDER, age
55, of Plymouth, Massachusetts, pleaded guilty before U.S. District Judge Paul
J. Barbadoro to a Superseding Indictment charging him with conspiracy to
defraud the United States; submitting false claims against the United States;
accepting bribes; filing false tax returns and embezzling approximately
$180,000 through a separate scheme.
SCHROEDER was named last month in a Superseding Indictment along with
Steven A. Milkiewicz, age 48, of Scituate, Massachusetts. Milkiewicz is
charged with conspiracy to defraud the United States; submitting false claims
against the United States; filing false tax returns and paying bribes.
At today’s plea hearing the prosecutor told the Court that, had the case
proceeded to trial, the evidence would have proven that SCHROEDER was employed
as a Property and Procurement Administrator for the Clerk of the Court for the
U.S. District Court for the District of Massachusetts for approximately twenty
years. Having gained the trust of his colleagues over time, SCHROEDER was
subject to little effective supervision in his day-to-day activities.
SCHROEDER took advantage of his position, beginning around 1997, by
causing the Court to make payments for non-existent supplies to a company
known as MS & Associates, which was nothing more than a mailbox and bank
account that he controlled. Between 1997 and 2002, SCHROEDER embezzled
roughly $180,000 through the payments to MS & Associates.
Also in 1997, SCHROEDER began his conspiracy with Milkiewicz, a long-time
provider of office supplies and furniture to the Court. SCHROEDER and
Milkiewicz maintained a charade of open bidding for office supplies and
furniture contracts by having Milkiewicz submit bids from the companies he
controlled, C.J. Sales and J. Cameron Company, and by arranging for others to
submit sham bids. In some instances, Milkiewicz arranged for a third-party to
win a fraudulently-inflated bid, on the condition that Milkiewicz would pocket
the excess profit. SCHROEDER received a share of the excess profits, which
Milkiewicz kicked- back to him in cash. This arrangement between SCHROEDER and
Milkiewicz resulted in the Court being overcharged approximately $178,000 for
supplies and furniture.
To further pad their illegal profits, SCHROEDER and Milkiewicz arranged to
deliver only a fraction of the supplies that were ordered and paid for by the
Court. In some instances, for example, the Court would be charged for 500 or
600 cartons of copier paper, at a fraudulently inflated price, while only 400
cartons were delivered. The Court paid approximately $77,000 for purchases
from Milkiewicz’s that were never delivered.
SCHROEDER also pleaded guilty to filing false returns by failing to report
his income from the embezzlement and kickback schemes.
Judge Barbadoro scheduled sentencing for April 4, 2005 at 10:30 AM in
Boston. SCHROEDER faces prison terms of up to 5 years for conspiracy, 5 years
for each of seven counts of submitting false claims against the United States,
15 years for accepting bribes as a federal employee, 10 years for embezzling
federal funds and 3 years for each of four counts of filing false tax returns.
Each count also carries a maximum $250,000 fine and 3 years supervised
release.
The charges are still pending against Milkiewicz. If convicted, Milkiewicz
faces prison terms up to 5 years for conspiracy, 5 years for each of seven
counts of submitting false claims against the United States, 2 years for
paying bribes to a federal employee and 3 years for each of four counts of
filing false tax returns. Each count also carries a maximum $250,000 fine and
3 years supervised release.
The case was investigated by the U.S. Internal Revenue Service, Criminal
Investigation and the Federal Bureau of Investigation. It is being prosecuted
by Assistant U.S. Attorney Paul G. Levenson in Sullivan’s Public Corruption
Unit.
