In a case that reveals how stunningly easy it can be to dupe the federal government out of millions of dollars, a Los Angeles area man has pleaded guilty to diverting thousands of surplus government computers and other electronics bound for needy schools to sham nonprofits.
Federal prosecutors in Washington state recently announced Steven Alexander Bolden’s guilty plea, saying he posed as 14 different nonprofits to bilk the government’s Computers for Learning program.
The program, administered by the General Services Administration, transfers excess computers and other equipment to schools and nonprofit groups. Bolden, 50, posed as qualified educational groups to get the government to send him computers, then sold the equipment online through Craigslist and elsewhere, according to an affidavit filed in the case.
The scheme went undetected for six years, raising questions about gaps in oversight of the program. By the time an undercover agent from the GSA’s inspector general caught Bolden, he had received nearly 20,000 pieces of surplus equipment for which the government paid $30.3 million, according to records.
“These computers are intended to benefit charities and schools, not to be sold on Craigslist for personal profit,” GSA Inspector General Brian Miller said in a statement Tuesday to The Washington Times.
Bolden, who pleaded guilty to wire fraud, identity theft and a felony tax charge, even balked at paying the government’s shipping costs, stiffing delivery bills to the tune of more than $100,000, prosecutors said.
An attorney for Bolden declined to comment.
GSA officials said in a statement Tuesday that they are pleased with the progress of the case and have tightened oversight of the program, which makes electronics available to schools and nonprofits at no cost.
“To further prevent fraud in the Computers for Learning Program, GSA now requires participating educational institutions to also provide documents as additional proof of their tax exempt status,” agency spokesman Dan Cruz said.
The court documents detail the undercover operation that exposed Bolden’s scheme, including his assurances that the computers were getting into the hands of needy students.
An undercover agent, acting the part of a GSA official looking to offload surplus laptops and bags, listed surplus equipment on GSA’s Computers for Learning site on July 2, 2012, according to the affidavit.
Later that day, an emailer calling himself “George Browning” from the Palmdale Educational Development Schools asked that the computers be sent to an address in Palmdale, Calif. Investigators found the address was a storage unit and that Bolden was Browning.
In a phone call the next day, Browning, identifying himself as director of Palmdale Educational Development Schools, told the investigator that he was tired of his students using old computers or no computers.
He also said he knew it was a crime to try to resell the equipment, adding, “I know for a fact you won’t get me to sell anything,” according to an exchange outlined in court records.
The next week, GSA investigators packed the computer equipment in boxes sealed with bright-green duct tape, then sent them through FedEx to the storage unit. Unbeknownst to Bolden, federal agents were watching from afar.