- Associated Press - Thursday, September 18, 2014

LOUISVILLE, Ky. (AP) - A federal grand jury has added charges against a former federal military contractor accused of writing a federal contract and creating a job with a private company at Fort Knox that ultimately worked to his financial benefit.

Prosecutors say 67-year-old Gary T. Meredith of Leitchfield orchestrated Nolin Rural Electric Cooperative’s overbilling the Army in the amount of $423,523 in unapproved projects. Grand jurors also charged Meredith with fraudulently billing the Army for his $190,401 salary.

The new indictment Meredith came Wednesday on the heels of a critical audit of Fort Knox’s energy program by the U.S. Department of Defense Inspector General. The Inspector General concluded on Sept. 8 that Fort Knox officials did not properly award and administer 108 task orders, valued at about $270 million, for energy savings projects. The end result was the possibility that Fort Knox spent millions on projects that may not have achieved sufficient energy savings to pay back the utility company’s investment as required or that they received fair and reasonable prices, Principal Assistant Inspector General Amy J. Frontz wrote.

“In addition, Fort Knox officials could not support the claim that projects achieved the projected energy savings,” Frontz wrote.

Fort Knox Garrison Commander Col. Thomas J. Edwards, in response to the audit, wrote that the post has established a new job to oversee billing and put new administrative controls in place to prevent fraud from happening in the future.

An attorney for Meredith did not immediately return messages from The Associated Press seeking comment on Wednesday or Thursday.

Meredith and his company, Gary Meredith and Associates, also face a civil suit from the federal government that, like the indictment, accuses him of manipulating an energy conservation contract to his benefit. Prosecutors say Meredith steered hundreds of thousands of military contracting dollars to his own company in an effort to create a lucrative retirement for himself. That suit is on hold while the criminal case plays out.

The new charges cover a period between January 2009 and August 2010. The grand jury alleged that Meredith created a scheme to defraud the United States at Fort Knox by instructing Nolin to overbill for a series of projects that weren’t related to an approved contract for natural gas and solar panels.

Meredith is charged with committing acts affecting his personal financial interest and eight counts of wire fraud.

Meredith worked from 1987 through 2007 as the energy program director at Fort Knox, with the job of finding ways for the military post to conserve energy. From 1996 on, Fort Knox worked with Nolin Rural Electric Cooperative on the program. Meredith retired as a civilian employee with the U.S. Army in August 2007 and immediately went to work for Nolin, using the same office and computer at Fort Knox he had while serving in the military.

Two years earlier, Meredith created and signed a deal creating an energy savings program and sent the request for proposal to Nolin. The Army awarded the $2 million deal to Nolin in October 2007, with Meredith and his company, Meredith & Co., making $200,000 off of the contract he created.

Federal prosecutors say Meredith spent nearly two years negotiating with Nolin before retirement and had been talking with the company about a job when he wrote the contract and took the position he ultimately created.

Defense Criminal Investigator Jared Camper wrote in an affidavit that, in September 2006, Meredith orchestrated an illegal payment of $582,329 to Nolin to fund his future job with the company. The money should have gone to LG&E;, a utility that had been working with Fort Knox on the energy savings program at the time.

Nolin paid Meredith $653,428 for the job between Oct. 16, 2007 and Aug. 29, 2011.

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Follow Associated Press reporter Brett Barrouquere on Twitter: https://twitter.com/BBarrouquereAP

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