A judge on Tuesday sentenced a Virginia-based defense contracting firm to pay more than $4.1 million in fines and forfeitures as part of a corruption scandal in which one of the firm’s executives bribed a civilian employee from San Diego’s Naval Information Warfare Center in exchange for millions of dollars in government contracts.
Cambridge International Systems, Inc. was ordered to forfeit more than $1.67 million and pay a fine of $2.5 million after pleading guilty in April to a bribery conspiracy. The firm itted to committing the criminal act through a handful of employees, including Russell Thurston, a former executive vice president. Thurston has pleaded not guilty in a separate case and is set to go on trial next year.
Federal prosecutors said the government contracts that Cambridge was awarded in exchange for the bribes netted the company nearly $7.5 million in profit.
Cambridge’s founder and CEO, Kimberly Harokopus, told the judge on Tuesday that the guilty plea was the result of decisions by “a few bad actors,” but that the company has since spent about $2 million strengthening its compliance practices. “There was never an ethos of corruption at Cambridge,” she told U.S. District Judge Todd Robinson.
The case is part of a yearslong corruption and bribery scheme centered around James Soriano, a former civil engineer and certified contracting officer representative who worked for the Department of Defense at the Naval Information Warfare Center, which was previously known as the Space and Naval Warfare Systems Command, or SPAWAR.
Soriano, who now lives in Las Vegas, pleaded guilty in June to helping defense contractors obtain lucrative contracts in exchange for fancy meals and pricey tickets to sporting events. He also itted that he had secured no-work jobs for family and friends who funneled some of their earnings to him.
Among the perks that Soriano itted to receiving from Thurston were four tickets to the 2018 MLB All-Star Game at Nationals Park in Washington, D.C., that cost $8,454. Soriano also itted that Thurston secured no-work jobs for Liberty Gutierrez, Soriano’s close family friend who gave Soriano portions of her $77,000 yearly Cambridge salary, and one of Soriano’s family who had recently graduated from college. According to Soriano’s plea agreement, Thurston also fulfilled his request to hire two other individuals as consultants, including one who was paid $80 per hour.
Assistant U.S. Attorney Patrick Swan called Thurston’s alleged conduct “egregious” and said that Cambridge’s other executives should have noticed the wrongdoing over the years.
“Cambridge International Systems is pleased to have resolved a criminal matter regarding illegal acts of a rogue employee who is no longer with our company,” a spokesperson for Cambridge said in a statement. “Since the discovery of his actions, we have implemented a best-in-class compliance program to ensure all of our employees act with honor and integrity in all matters. We are eager to move past this unfortunate incident and to continue our mission to design and deliver products and services that protect our borders and create a safer world.”
Though federal sentencing guidelines dictated that Cambridge should have been on the hook for more than $14 million in fines — twice the amount that it profited — attorneys for the company argued the firm couldn’t pay nearly that much. Prosecutors initially recommended a $5 million fine, then negotiated with the company to pay half that amount. Swan said the government wanted to hold the firm able while also allowing it to financially survive.
Attorneys for Cambridge said that as part of the agreement, the company will pay $2.25 million to the federal government in installments over the next five years. The company will also place some money in a trust fund for the family of a Colombian employee who was slain last week.
Cambridge was the first defendant to be sentenced in multiple cases related to Soriano, who also itted in his plea that he accepted thousands of dollars worth of meals and tickets to the 2018 World Series and 2019 Super Bowl from Virginia-based defense contractor Philip Flores and his company, IntelliPeak Solutions. Flores and IntelliPeak have pleaded not guilty to the charges and are set to go to trial next year.
Soriano is set to be sentenced next May, while a woman who accepted bribes while working under him is scheduled for sentencing in November. Gutierrez, who took the no-work job at Cambridge and first pleaded guilty in 2021, is scheduled to be sentenced in February.
