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Marine captain charged with skimming fraud

March 4, 2010 12:00:00 AM PST
A captain in the United States Marine Corps has been charged in a Riverside court in a $1 million skimming scheme.Eric Schmidt, 39, of Murietta is accused of conspiracy to commit wire fraud, and filing a false tax return that concealed illicit income from the Internal Revenue Service. Investigators say Schmidt conspired with his wife to skim approximately $1.75 million from government contracts awarded under the Iraqi First Program.

Schmidt is assigned to the First Marine Division at Camp Pendleton. Schmidt's wife, Janet Schmidt, 39, also faces the same two felony counts.

Investigators say Schmidt used his position in the contracting process to steer contracts to his favored Iraqi contractor, the Al-Methwad Company. The contracts were awarded under the Iraqi First Program. The program was designed to deal with Iraqi vendors whenever possible to help improve the Iraqi economy.

Investigators say money was funneled through Al-Methwad to Schmidt's wife in the U.S. They say she used the money to buy fewer or inferior products than those required by the contract. Investigators say the products were shipped to Iraq where they were certified by Captain Schmidt.

Armed with the bogus certification, representatives from Al-Methwad Company sought and received payment from the United States. Investigators have determined that the Schmidts collected a total of approximately $1.75 million in illegal payments during Captain Schmidt's one-year deployment to Iraq in 2008.

Schmidt and his wife now face up to 23 years in federal prison.