2 plead guilty in RI in $18M Navy kickback scheme

PROVIDENCE, R.I. (AP) -- The admitted leader of a kickback scheme that cost the U.S. Navy $18 million pleaded guilty Thursday in U.S. District Court in Rhode Island.

Ralph Mariano changed his plea to guilty on three charges of conspiracy, theft of government property and tax evasion shortly after his girlfriend, Mary O'Rourke, pleaded guilty to theft of government property in the same case. The maximum Mariano could receive on the three counts is 20 years when he is sentenced later this year, prosecutors say.

Mariano, 55, of South Arlington, Va., was a civilian Navy employee for more than 38 years. He acknowledged he used his position as an engineer at the Naval Undersea Warfare Center to add money to contracts held by Georgia-based contractor Advanced Solutions for Tomorrow, or ASFT, which prosecutors say received $160 million in Navy funding during the 15-year duration of the scheme.

In return, the now-defunct ASFT, which also had an office in Middletown, R.I., funneled kickbacks to Mariano, corrupt subcontractors, members of Mariano's family, its own staff and others.

All six people charged in the case have now pleaded guilty. Plea agreements Mariano and O'Rourke signed required both to plead guilty. If either did not, the other's deal with prosecutors would be void.

During his change of plea hearing before U.S. District Judge Mary Lisi, Mariano leaned awkwardly on the defense table on his fists at times. More than once, there were long periods of silence before he answered the judge's questions about his understanding of the proceedings. He at first indicated he did not know his plea agreement was contingent on O'Rourke's, then reversed himself and said he did.

Outside court, Mariano and his lawyer had no comment.

U.S. Attorney Peter Neronha said he was pleased with the guilty pleas, which he said bring an end to a long investigation. He said he hopes they send a message.

"It's obvious that these contracts involved a tremendous amount of taxpayer money," Neronha said outside the courthouse. "To steal it to fund a lavish lifestyle, as was done here, is incredibly insulting and inappropriate to the taxpayer."

Neronha declined to say how much prison time prosecutors will seek for Mariano.

The government will recommend probation for O'Rourke, 50, whom it says was a "minor participant" in the scheme.

"My client is very relieved that this is essentially over," attorney William Devereaux said after the proceeding. He said she is looking forward to moving on with her life.

Sentencing for Mariano and O'Rourke was set for Sept. 5.

The four others who have pleaded guilty in the case are ASFT's founder, Anjan Dutta-Gupta of Roswell, Ga.; former ASFT executive Patrick Nagle of Marietta, Ga.; ASFT subcontractor Russell Spencer, who has said he acted as a middleman; and Mariano's father, Ralph Mariano Jr., who prosecutors say received more than $2 million from the scheme. None of them has been sentenced yet.