Human Interest

"BLACK MAN CO-CONSPIRED TO DEFRAUD PENTAGON  OUT OF $8.4 MILLION DOLLARS"

Defense Criminal Investigative Service agents, in cooperation with the U.S. Marshals, are on the hunt for an entrepreneur turned self-made con man who bilked the Department of Defense out of $8.4 million in defense contracts.

Roger Charles Day, Jr., (above) was a slick con man who used his street smarts to outsmart the DOD (Department Of Defense) in a scam that included off-shore bank accounts, shell companies, bars of gold, South African Krugerrand and a scheme to fake his own death.

Co-conspirator, Nathan Carroll, was ordered to forfeit his house, truck and the gold bars.

Investigators who tracked Day in the early 90's say he worked in his father's hardware store in Boonton, N.J. But when his father wouldn't expand the business, Day decided to start his own company. He called it American Tool and Quality Machinery and installed his wife as "president."

Aware of the government's "fast pay" system which allowed small businesses to get paid before goods were delivered -- Day did what any good con would do -- he seized this rare opportunity to exploit the system and submitted numerous bids.

According to investigators, Day admitted to lying to the government about one of his companies. He and his wife falsely claimed that one of the companies was a woman-owned entity which entitled it to special consideration when contracts were awarded.

Court records reveal that from October 1991 to November 1995, Day and his wife bribed officials with cash, cigars, a chain saw, a Harley-Davidson motorcyle and bottles of whiskey in order to obtain 238 federal contracts.

And these weren't just any kind of contracts - these were Grade-A government contracts involving the supply of special nuts and bolts used in nuclear reactors, M-60 tanks, and in Poseidan and Trident submarines. But agents say instead of supplying the special materials needed, Day purchased ordinary nuts and bolts from hardware stores.

In order to secure the success of his fraudulent scheme, Day forged the signature of the Defense Department official charged with inspecting goods before shipment. But Day was tripped up when Defense officials discovered the forgery and sent in an undercover agent posing as a quality inspector to meet with Day. It was then that Day admitted to giving the agent $5,000 to keep quiet about the forgery.

When Day was indicted on the alleged scheme to pay kickbacks to Newark city officials, he and his wife fled to Hawaii with stolen passports. From Hawaii the couple made their way to New Zealand, Indonesia, Switzerland and finally Italy.

Day and his wife were on the run for several months. But Day's run from justice would be short-lived -- right before Thanksgiving in 1995, while attempting to board a flight to Zurich, Switzerland, he and his wife were arrested by Italian police. Although Day's wife waived extradition and was deported back to the U.S., Day fought extradition from his Italian jail cell.

Eventually Day was returned to the U.S. where he was sentenced to eight years in prison.

In an attempt to conceal DOD proceeds, co-conspirator, Greg Stewart, above, admitted to smuggling gold across the border from the U.S. into Mexico.

Day was released from prison after serving six years. As a condition of his parole, he was placed under house arrest. Investigators say not even house arrest was a deterent to Day who was able recruit new cohorts for his old scam.

Susan Crotty, Day's girlfriend, was aware of Day's checkered past and helped Day begin his old scam all over again. In June 2005, Crotty established a new company in her name along with Day and was awarded a new DOD contract to supply military parts.

Crotty then allowed Day to use her personal credit card to purchase substandard product parts which were to be shipped to the DOD. Under Day's instructions, she packed and delivered the parts to a shipping company for shipment. But Day and Crotty weren't alone. An old Day acquaintance, Nathan Carroll, and other co-conspirators, set up more than a dozen fake companies and together, designed a computer program that would distribute lucrative DoD contracts to Day's various companies.

It paid off. Between 2005 and 2007, Day's "companies" won contracts to supply thousands of critical parts used in various U.S. military weapons systems, including the Trident Submarine, F-16, and M1A Abrahms. Investigators say all the parts Day supplied were bad and worth a tiny fraction of what the genuine military-grade parts cost. Like Crotty, Carroll and his cohorts purchased and shipped defective parts to the military and then submitted invoices which garnered them payments of nearly $3.7 million.

To keep one step ahead of law enforcement, Day and his cohorts would shut down and resurface under new names, new companies, new addresses and new telephone numbers only to start their scam all over again.

But Day had an exit plan. Sometime in 2006, he disappeared down into Mexico where he continued to operate his fraud. But when things got too hot, investigators believe he may have faked his death by pretending to drown in the ocean near the Mexican resort town of Huatulco (pronounced wah-TOOL-coe).

Convicted in Federal Court, Day's co-conspirator, Nathan Carroll, was sentenced to eight years in prison and ordered to pay $3,696,235 in restitution. Carroll's adventure cost him -- police went on to seize all his assets including $5,487 in cash, real estate in New Jersey, a 1999 Ford Expedition, three 10-ounce gold bars and all the contents in nine foreign bank accounts located in Estonia, Singapore, Mexico, Panama, Belize, and Switzerland.

Greg Stewart's jet-setting life-style came to a screeching halt when he was arrested at the Hartsfield-Jackson Atlanta International Airport while flying from Mexico to Canada. He was convicted on aggravated identity theft and conspiracy to commit wire fraud charges. Agents say Stewart is slated to go before a judge for sentencing on April 29, 2008, and could face up to 22-years behind bars and $500,000 in fines.

Day's girlfriend, Susan Crotty, was convicted in federal court and is currently awaiting sentencing.

Day remains at large.