Courts: Kickbacks earns Mariano 10 years

(Published in The Providence Journal on Nov. 2, 2013)

PROVIDENCE, R.I. -- Ralph M. Mariano, called the mastermind of a kickback scheme in which nearly $18 million in Navy contract money was stolen and led to more than 100 people losing their jobs, was sentenced Friday to 10 years in federal prison, one month short of the maximum. When Mariano, through his lawyer, made statements about deserving some leniency, Chief U.S. District Judge Mary M. Lisi said before sentencing: "That rings hollow, when I consider the devastation you left in your wake." Lisi also ordered Mariano, 55, along with various others who have pleaded guilty in the scheme, to pay $17,957,000 in restitution. But whether the taxpayers and the Navy will ever be made whole again remains to be seen. Mariano was a civilian employee, a senior systems engineer at the Naval Undersea Warfare Center in Newport, drawing a salary of $155,500 in 2011 but was, the prosecution argued, motivated by greed. Mariano, of Warwick, received $5 million of the kickbacks, according to prosecutor Lee H. Vilker. Mariano, who had no previous criminal record and has been free on bond since being charged nearly three years ago, was ordered to report to prison on Nov. 26. The devastation, Lisi said, was to the taxpayers, his friends, the Navy and "all of these people" who lost their jobs when, in February 2011, Advanced Solutions for Tomorrow, or ASFT, the contractor that Mariano used as part of the scheme, closed after the Navy suspended its contracts. It had offices in Middletown and Georgia. "He wanted to live the life," Lisi said. According to the prosecutors' portrayal, that was a life lavishing thousands of dollars on things such as gambling vacations to Aruba, Mexico and Las Vegas and spending more than $100,000 on luxury cigars. Mariano apologized on Friday and asked the judge for leniency. He said his actions that were part of the allegations had been "foolish" and "stupid." In February 2011, Mariano was arrested along with Anjan Dutta-Gupta, who founded and was president of ASFT. Dutta-Gupta was accused of funneling millions of dollars to Mariano, his relatives and friends in return for getting Navy contracts for the technology firm. Mariano sought payments from Dutta-Gupta and also directed that shell corporations be created that claimed to be ASFT subcontractors, billing ASFT nearly $18 million for work that was not done, according to the prosecution. In May, Mariano pleaded guilty in U.S. District Court to conspiracy to commit theft of government property, theft of government property and tax evasion for underreporting earnings by $1.8 million. According to the U.S. Attorney's office, Mariano admitted that from 1999 to 2011 he used his position at the Naval Sea Systems Command to direct Russell Spencer, a computer software specialist, to submit fraudulent invoices to ASFT and to ASFT subcontractors. Mariano had ASFT and the subcontractors pay Spencer the money on the invoices using government money that ASFT got from the Navy. Mariano directed Spencer to distribute the money to him and others. Five others have pleaded guilty: Dutta-Gupta; ASFT chief financial officer Patrick Nagle; Spencer; Mariano's girlfriend, Mary O'Rourke; and Mariano's father, Ralph Mariano Jr., who was sentenced in August to two years of home confinement and probation for failing to pay upward of $400,000 in income taxes. As a result of "Mr. Mariano's avarice and arrogance," Lisi said Friday, "his 82-year-old father is now a convicted felon." The Probation Department, according to prosecutors, decided that Mariano fell within a sentencing guideline range of 97 months to 121 months. Prosecutors sought the top end of that, saying the Probation Department agreed Mariano had failed to show that he accepted responsibility for his actions. But Mariano's lawyer argued in a sentencing memorandum that the prosecution sought a high prison sentence, at least in part, because Mariano has alleged prosecutorial misconduct in documents sent to the Department of Justice's Office of Professional Responsibility. Mariano accepted responsibility in May and never retracted the plea, his lawyer, John L. Calcagni, told the judge. "There's a lot more to Mr. Mariano than a convicted felon," Calcagni said. He added that Mariano has "done many good things in his life." Calcagni said Mariano is destitute. After the sentencing, U.S. Attorney Peter F. Neronha said it was his hope that Friday's outcome sent a message. Mariano, Neronha said, was a kind of "modern-day pirate" and "his plunder was a Navy contract."