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UNITED STATES mSTRTCT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION
UNITED STATES OF AMERICA,
v.
) ) ) ) ) )
Criminal No.1
iCR0609
) VIOLATIONS:
Count One: 18 U.S.C. 1349 (conspiracy)
1) RAUL BORCUTA,
2) ZACHERY TAYLOR,
3) JARRED CLOSE,
Defendants.
) ) ) ) ) )
Count Two: 18 U.S.c. 1343 (wire fraud)
Count Three: 18 U.S.c. 134 1
(mail fraud)
Count Four: 18 U.S.C. 134 I
(mail fraud)
Count Five: 18 U.S.c. 201
(b)(l)(A)-(C)
(bribery)
Count Six: 18 U.S.C 20l(b)(l)(A)-(C)
(bribery)
Count Seven: 18 U.S.C. 201(b)(2)(A)-(C) (bribery)
Count Eight: 18 U.S.c. 201(b)(2)(A)-(C) (bribery)
Count Nine: 18 U.S.c. 641
(theft of government funds)
INDICTMENT
The Grand Jury charges that:
BACKGROUND
1. For the purposes ofthis indictment, the "relevant period" is that period from in or
about October of2009 until at least in or about October of2010.
2. Following the overthrow of
the Taliban regime, the United States and allied
nations undertook an effort to develop the infrastructure and economy ofthc Islamic Republic of
Afghanistan (hereinafter "Afghanistan"). The development projects that the United States
undertook in Afghanistan included building transportation networks, improving Afghanistan's
energy infrastructure, and constructing healthcare and educational facilities. To complete these
development projects, the United States sent a Provincial Reconstruction Team (PRT) to Farah,
Afghanistan. The PRT was composed of individuals in the
United States Military and other
United States Government agencies. The PRT was funded with money from the United States
Treasury and it had autho;ity to enter into contracts on behalf of
the United States.
3. The PRT issued contracts that were fundcd with money from the Commander's
Emergcney Response Program (CERP). The purpose of
the CERP was to enable United Siates
Military commanders to respond to urgent humanitarian relicf and reconstruction requirements
within thcir area of
responsibility by carrying out programs that would immediately assist the
indigenous population. The CERP was funded with appropriations from the United States
Government. In November of 2003, Congress passed the first appropriation for CERP as part of
Public Law 108-106, the "Emergency Supplemental Appropriations Actfor Defense and For the
Reconstruction of Iraq and Afghanistan, 2004." Since 2004, Congress has made additional
appropriations of CRRP funds in Department of Defense annual and supplemental
appropriations. Disbursements of CERP funds were typically made through wirc transfers made
from accounts in Afghanistan held by the United States Governmcnt to accounts held by the
con~raetor.
4. Defendant JARRED CLOSE was a Staff Sergeant in thc United States Army
Active Guard Reservc Program. At all times material herein, JARRED CLOSE was an o1cer,
employee, or person acting for or on behalf of
the United States Department of Defense.
Sergeant in the United States Army
S. Defendant ZACHERY TAYLOR was a Staff
Active Guard Reserve Program. At all times material herein, ZACHERY TAYLOR was an
ofIcer, employee, or person acting tor or on behalf ofthe United States Department of Defense.
6. CH, a person known to the grandjury, was an individual residing in the Northern
District of Ilinois.
7. Harris Bank, N.A. (hereinafter "Harris Bank") was a corporation headquartered in
Chicago, Illinois that did business as a lending institution throughout the United States, including
thc Northern District of
Ilinois. Money deposited with Harris Bank was insured by the Federal
Deposit Insurance Corporation.
8. Afghanistan International Bank was a corporation hcadquartcrcd in Kabul,
Afghanistan, which did business in Afghanistan.
9. In or about May of 2009, TAYLOR and CLOSE were deployed to Afghanistan
and assigncd to the PRT in Farah. TAYLOR worked as a paying agent and CLOSE was a project
officer. Their dutics incILded negotiating and executing on behalf of the United States
Government contracts funded with CERP lunds. TAYLOR's and CLOSE's rcsponsibilities
included identifying contractors to pertorii work for the PRT, defining the scope of
work that
was to be performed, and authorizing payment requests submitted by firms and individuals that
were selected to pertorm contracts.
10. Defendant RAUL BORCUT A was an individual who maintained a residence in
the Northern District of
Ilinois. In or about February of20IO, BORCUTA worked and resided
in Afghanistan, where he had been employed by a defense contractor that supported the Unitcd
States's military operations in that country.
11. On or about February 10,2010, CLOSE issued a Statement of
Work which
contracted with BORCUTA and Logistical Operations Worldwide, a fictitious business
association creatcd by BORClHA, to
provide two armored sport utihty vehicles to be used by
local Afghan government otTcials in Farah, Afghanistan.
12. On or about February 19,2010, BORCUT A and CLOSE signed CURl' Contract
Number 20100202171045 (the "Contract"), which incorporated the Statement otWork described
in paragraph 11 herein and set the contract value at $200,000 (made payable in the equivalent
amount of
the legal currency ofthc Islamic Republic of Afghanistan).
13. On or about February 19,2010, BORCUT A signed and submitted an invoice
which sought a 100% lip front payment (i.c., a payment before contractual performance) of
$200,000 on the contract.
14. On or about February 19,2010, TAYLOR and CLOSE authorized payment of
$200,000 to RAUL BORCUTA and Logistical Operations Worldwide by countersigning thc
invoice described in paragraph 13 even though BORCUTA had not delivered the vehicles
describcd in the Contract.
15. On or about February 28, 2010, the U.S. Army Finance Offce in Kandahar,
Afghanistan paid the invoice described in paragraph 13 herein by sending a wire transfer in the
amount of9,476,000 Afghanis, the cunency of
the Islamic Republic of Afghanistan (equivalent
to $197,217.04), from an account held by the U.S. Treasury at Afghanistan International Dank to
Harris Bank in Naperville, Illinois, in the Northern District of Ilinois. The wire transfer was sent
from Afghanistan to the State of
Ilinois by way of a wire transfer to Commcrz Bank, AG in
New York. The Harris Bafe aCOunl that
Germany and Wachovia Bank, N.A. in thc State of
received this wire payment was held by BORCUTA and CI-l.
16. At no time did BORCUTA deliver the vehicles described in thc Contract.
COUNT ONE
18 U.S.c. 1349
(Cunspiracy)
17. Paragraphs 1 tlnough 16 of this Indictment are re-alleged and incorporated herein
as if sct forth in fulL
18. Bcginning at least as early as in or about October 2009, and continuing through at
least in or about October 2010, in the Northern District of
Ilinois and elsewhere.
RAUL BORClJTA, ZACHERY TAYLOR, JARRED CLOSE,
defendants herein, did knowingly and intentionally combine, conspire, and agree with others
known and unknown to the grand jury to commit the following two offenses:
a. Wire Fraud, that is, to devise and intend to devisc a scheme and artificc to
defraud and for obtaining money and propert by means of materially false and fraudulent
pretenses, representations and promises, and material omissions, and for the purpose of executing the scheme and artifice, using wire communications in interstate commerce, in violation of Titlc
18, United States Code, Section 1343.
b. Mail Fraud, that is, to devise and intend to dcvisc a semc and artifice to
defraud and for obtaining money and propcrty by
means of materially false and fraudulent
pretenses, representations and promises, and material omissions, and for the purpose of cxecuting
the scheme and aitifiee, using the United States Postal Service and commercial interstate carriers
to send and deliver mail matter, in violation of l' it
Ie 18, United States Codc, Section 1341.
The Purpose and Object ot'the Conspiracy
19. The purpose and object of
the conspiracy was for BORCUTA to:
a. influence TAYLOR and CLOSE to award him the Contract by paying hoth
TAYLOR and CLOSE $10,000 each;
b. influence TAYLOR and CLOSE to authorize payment under the Contract
befote BORCl.T A performed his contractual obligations by paying both TAYLOR and CLOSE
$10,000 each; and
c. steal money from the United States by collccting a $200,000 payment
under the Contract without performing his contractual obligations.
Manner and Means
20. The maimer and means by which the defendants sought to accomplish the
purposes and objectives of
the conspiracy include, but arc not limited to, the following:
a. TA YLOR and CLOSE awarded BORCUT A CERP Contract Numbcr
20100202171045, which required BORCUTA to provide two up-armored vehicles in exchange
for $200,000 (made payable in the equivalent amount of the legal currency of
the Islamic
Republic of Afghanistan).
b. BORCUTA, TAYLOR and CLOSE agreed that BORCUTA would pay
TA YLOR and CLOSE $10,000 each to influence them to award BORCUTA CERP Contract
Number 20100202171 045.
c. BORCUTA submitted to TAYLOR and CLOSE an invoicc seeking an up
fron: payment of $200,000 before the vehicles were delivered.
d. TAYLOR and CLOSE acecpted BORCUT A's invoice and authorized the
Kandahar Finance Office of the United States Army to make a wire transfer, in international and
interstatc commerce, in the amount of9,476,000 Afghanis (the cquivalent of$197,2l7.04) from
an account held by the United States Treasury at Afghanistan International Bank to en account at
Harris Bank in Illinois held by BORCUTA and CH.
e. BORCUT A paid TAYLOR and CLOSE $10,000 each to influence them to
make to BORCUTA a $200,000 paymel't under CERP Contract Number 20100202171 045 cvcn
though BORCUTA had not satisfied his contractual obligations.
f. After receiving the proceeds of the wire transfcr, BORCUTA causcd CII
to purchase from a Harris Bank branch in Naperville, l1inois, in the Northern District of l1inois,
two cashier's checks each for $10,000. One of
these $10,000 cashier's checks was ,nade payable
to TA YLOR and the other $10,000 cashier's check was made payable to CLOSE. CH sent the
checks to TA YLOR and CLOSE via United States mail from and within the Northern District of
Ilinois. CH sent the checks to TAYLOR and CLOSE at the direction of BORCUT A and
transmitted the checks in two separate mailings.
g. At no time did BORCUTA deliver the vehicles described under the
Contract.
All in violation of Title 18, United States
Code, Section 1349.
COUNT TWO
18 U.S.c. 1343 and 2
(Wire Fraud and Aiding and Abetting)
21. Paragraphs 1 through 16 and 20 of
this Indictment are re-al1eged and incorporated
herein as if set forth in full.
22. Beginning at least as early as in or about October 2009, and continuing through at
leas! iii or about Octobcr 2010, in the Northern District of Ilinois and elsewhere,
RAUL BORCIJTA, JARRED CLOSE, ZACHERY TAYLOR,
defendants herein, did knowingly and inlenlional1y devise and intend to devise a scheme and
artilce to dcIaud and for obtaining money and property by means of material false and
fraudulent pretenses, representations and promises and for the purposc of executing the scheme
to dcfraud, and attempting to do so, knowingly caused to be transmitted, and aided and abetted
the transmission of, hy means of
wire communication in interstate and inten~ational commerce
thc wire transfer described herein.
n. The object of
the scheme and ai1ifice to defraud was for BORCUTA to:
a. influence TAYLOR and CLOSE to award him the Contract by paying both
TA YLOR and CLOSE $10,000 each;
b. influence TAYLOR and CLOSE to authorize payment under the Contract beore
BORCUTA performed his contractual obligations by paying both l' AYLOR and CLOSE
$10,000 each; and
7
". to steal money from the United States by collecting a S200,000 payment undcr the
Contract without performing his contractual obligations.
24. It was part of
the scheme and artifice to defraud that BORCUTA agreed to and did in
fact pay l' AYLOR and CLOSE $10,000 each to award to BORCUT A a PRT contract (CERP
Contract Number 20100202171045) to provide
two up-armored vehicles and to pay the whole
value of
the Contract before the vehicles were dclivered.
25. It was further part of
the scheme and artifice to defraud that on or about February 19,
2010, TAYLOR and CLOSE authorized a wire payment to BORCUTA in the amount of
$200,000 even though BORCUTA had not delivered the two vehicles required by the Contract.
26. On or about Februar 28,2010, in the Northern District of l!inois and elsewhere, for
the purpose of executing the scheme and artifice, and attempting to do so, TAYLOR and CLOSE transmitted and caused to be transmitted by means of wire communications in interstate and
international commerce, a wirc transfer in the amount of $197,217.04, in viclation ofTitlc 18,
United States Code, Sections 1343.
27. At no time did BORCUT A deliver the vehiclcs described under the Contract.
All in violation of Titlel8, United States Code, Sections 1343 and 2.
COUNTS THREE THROUGH FOUR 18 U.S.C. 1341 and 2 (Mail Fraud and Aiding and Abetting)
28. Paragraphs 1 through 16, 20 and 23-27 ofthe Indictment are re-alleged and
incorporated herein as if set forth in nill.
29. Beginning at least as early as in or about October 2009, and continuing through at
least in or about October 20 1 0, in the Northern District ofIllinois and elsewhere,
RAUL BORCUTA, JARRED CLOSE, ZACHERY TAYLOR,
defendants herein, did knowingly and intentionally devise and intend to devise a scheme and
artifice to defraud and for obtaining money and property by means of material false and
fraudulent pretenses, representations and promises and for the purpose of the scheme to defraud,
knowirigly caused to be delivered by the United States mail or by a commercial interstatc carrier
the mail
mattcr described herein.
30. On or about the dates set forth below, in the Northern District of Ilinois and
elsewhere, for the purpose of executing the schemc and artificc, and attempting to do so, the
dcfendants caused CH to place mail
matter in a post offcc and authorized depository for mail
matter, to be sent and delivered by the United States Postal Service, and did knowingly cause
mail matter to be dc1ivered by mail according to the dircction thereon, that is, the payments
identified below, with each mailing constituting a separate violation of Titlc 18, United States
Code, Section 1341.
Count
3
Date
3/9/2010
Description
cashier's check in the amount of$IO,OOO made payable to CLOSE, with the knowledge and approval 01'
A mailing containing a
BORCUTA, for the purpose of influencing CLOSE's oftcial actions and decisions.
4
3/9/20 i 0
A mailing containing a
cashier's check in the amount of$lO,OOO
made payable to TAYLOR, with the knowledge and approval of
BORCUTA, for the purpose of influencing TA YLOR'.s official
L....
actions and decisions.
All in violation of Titlel8, United States Code, Sections 1341 and 2.
COCNTS FIVE AND SIX 18 U.S.C. 201(b)(l)(A)-(C) (Bribery)
31. Paragraphs 1 through 16,20,23-27, and 30 of
the Indictment are re~aiieged and
incorporated herein as if set forth in fulL.
32. Beginning at least as early as in or about October 2009, and continuing through at
least in or about October 2010, in the Noiihern District of Ilinois and elsewhcre,
RA.UL BORCUTA,
defendant herein, directly and indirectly, did corruptly give, offer, and promise something of
value to a public offcial, with intent to influence official acts and to induce such public offcial
to do and omit to do acts in violation of
the lawful duty of such offcial; that is, BORCUTA
corruptly gave, offered, and promised the following payments to l' AYLOR and CLOSE in return
for TAYLOR and CLOSE awarding him pRT contract number 20100202171 045 and to pay
BORCUTA 100% of
the Contract value bcfore BORCUT A performed the Contract:
Count
5
Date
3/9/20 i 0
Description
BORCUTA caused CH to mail to CLOSE a payment of $10,000.
3/9/2010
BORCUTA caused CII to mail to TAYLOR a payment of $10,000.
All in violation of
Title 18, United States Code, Section 201(b)(1)(A)-(C).
COUNT
SEVEN
18 U.S.c. 201(b)(2)(A)-(C)
(Bribery)
33. Paragraphs 1 through 16,20,23-27, and 30 ofthe Indictment are re-alleged and
incorporated herein as if set forth in fulL.
34. Beginning at least as early as in or about October 2009, and continuing t'rough at
least in or about October 2010, in the Northern District of
Ilirois and elsewhere,
ZACHERY
TAYLOR,
as a public official, directly and indirectly did corruptly demand, seek, receive, accept, and agrcc
to receive and accept things of value
in return for being influenccd in the performance of olfcial
acts, and in rcturn for being induced to do and omit to do acts in violation of a lawful duty; that
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is, TAYLOR corruptly demanded, sought, received, accepted, and agreed to receive and accepted
$10,000 tram BORCUTA in return for awarding BORCUTA a pRT contract (number
20100202171 045) and authorizing payment of iOO% of
the Contract value bcfore BORCUT A
performed the contract.
All in violation ofTitIe 18, United States Code, Section 201(b)(2)(A)-(C).
COUNT EIGHT
18 IJ.S.c. 201(b)(2)(A)-(C)
(Bribery)
35. Paragrzphs 1 through 16,20,23-27, and 30 of
the Indictment are re-alleged and
incorporated herein as if set forth in full.
36. Bcginning at least as early as in or a'Jout October 2009, and continuing tlu'ough at
least in or bout October 2010, in the Northem Oistric\ of
Ilinois and elsewhere,
JARRED CLOSE,
as a public olfcial, direcCy and indirectly did cDrmp\ly demand, seek, receive, accept, and agree to receive and accept things of value in return for being influenced in the performance of official
acts, and in return for being induced to do and omit to do acts in violation of a lawlul duty; that
is, CLOSE corruptly demanded, sought, received, accepted, and agreed to receive and accepted
$10,000 from BORCUTA in return for awarding BORCUT A a pRT contract (number
20100202171045) and authorizing payment of 100% ofthc contract value before BORCUTA
performed the Contract.
All in violation ofTitIe 18, United States Code, Section 201(b)(2)(A)-(C).
11
COUNT
NINE
18 U.S.c. 641
(Theft of government funds)
37. Paragraphs 1 through 16, 20, 23-27, and 30 of the Indictment are re-alleged and
incorporated herein as ifset forth in fulL.
38. Beginning at least as early as in or about October 2009, and continuing through at least
in or about October 2010, in the Northern District of
Ilinois and elsewhere,
RAUL BORCUTA,
did knowingly embezzle, steal, purloin, and convert to his use money and things 01' valuc 01' the
United States and a department and agency of the United States, that is, RAUL BORCUT A
knowingly and intentionally collected $197,217.04 from the United States Department 01' Defense
under the Contract to provide two up-armored vehicles when he then aJid there well knew that he did
not deliver the vehicles and had no intention of delivering the vehicles.
All in violation of
TitIc 18, United States Code, Section 641,
FORFEITURE ALLEGA nON
The SPECIAL JULY 2010 GRAND JURY further charges:
39. The allegations in Counts 1 through 8 of
this Indictment are re-alleged and
incorporated by reference for the purpose of alleging that certain property is subject to forfeiture
pursuant 10 Title 18, United States Code, Section 981 (a)(l )(C) and Title 28, United States Code,
Section 2461(c).
40. As a result 01' their violations of Title 18, United States Code, Sections 201, 1341,
1343, and 1349, as alleged in the foregoing Indictment,
RAUL BORCUTA, ZACHERY TAYLOR, JARRED CLOSE,
12
defendants herein, shall forfeit to the United States, pursuant to Title 18, United States Code,
Section, 981(a)(l)(C) and Title 28, United States Code, Section 2461(c), any and all right, title
and interest in property, real and personal, which constitutes and is derived trom proceeds
traceable to the charged offenses.
41. The interests of
the defendants subject to forfeiture pursuant to Title 18, United States
2461(c) include but arc
Code, Section, 981(a)(l)(C) and Title 28, United States Code, Section
not limited to funds in the amount of $197,217.04.
42. If any of
the property subject to forfeiture and describcd abovc, as a result of any act
or omissioL of the defendants:
(a) Cannot be located upon thc exercise of due diligence;
(b) Has been transferred or sold to, or deposited with, a third party;
(c) Has been placed beyond the jurisdiction of the Court;
(d) Has been substantially diminished in value; or
(e) Has been commingled with other property which cannot be dvided without
diffculty,
the United States of Americ shll be entitled to forfeiture of substitute property, under the
provisions ofTitlc 21, United States Code, Section 853(p), as incorporated by Title 28, United
States Code, Section 2461 (c).
All pursuant to Title 18, United States Code, Section 981(a)(1)(C) and Title 28, United
States Code, Section 2461(C).
13
DATED: this
day of_.
, 20 i 1.
TRUE
BILL:
FOREPERSON OF THE GRAND JURY
LANNY A. BREUER Assislant Attorney General
Brian R. Young Trial Attorney Criminal Division United States Department of Justice
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