Diana Bakir Demilta pleaded guilty to one count of wire fraud, which carries a sentence of up to 20 years in prison and a $250,000 fine. The plea was filed in December 2007, but unsealed Wednesday in U.S. District Court in Washington as part of an ongoing investigation by multiple federal agencies.
Demilta is cooperating with the investigation in hopes of getting a reduced sentence.
She is a U.S. citizen and president of Global-Link Distribution LLC, a defense contracting company. The company was organized under U.S. law and operated out of the International Zone in Baghdad
Demilta admitted orchestrating the scheme between September 2004 and March 2005 so a Kuwaiti firm would win the contract and funnel the funds back to her. She also admitted paying at least $60,000 to a public official to influence the bidding process. The official was not named in court documents, but was described as a senior contracting adviser with the Civilian Police Assistance Training Team that was responsible for developing Iraqi police forces.
According to court documents, the official tipped Demilta off on Sept. 20, 2004, to the upcoming contract for 540 bulletproof vests. The official sent her an e-mail telling her to "use (her) various contacts to obtain three bids" the minimum number required by federal regulations for the competitive bidding process.
The next day, Demilta sent an e-mail instructing the owner of the Kuwaiti firm to submit three invoices "one in your name, one in mine and invent another." She told the owner to inflate one bid by 60 percent of the retail price and another by 80 percent.
The Kuwaiti firm sent in the lowest bid, at $375 per vest, and won the contract for $202,500. Demilta oversaw delivery of the vests to the Civilian Police Assistance Training Team warehouse in Baghdad on December 15, 2004. In February 2005, she prepared a voucher and presented it to an Army agent and collected the $202,500 in cash.
The court documents say the Defense Department lost more than $70,000 because of the scheme. Demilta has agreed to reimburse those funds as part of her plea agreement.