Ventura County

Oxnard man linked to Naval kickback scheme pleads guilty to federal charges

Ventura County businessman also implicated

VENTURA COUNTY, Calif. - An Oxnard man who worked at Naval Base Ventura County as a senior procurement official, a civilian position, pleaded guilty to his involvement in a kickback scheme spanning more than two decades.

According to details released by the Department of Justice (DOJ), Fernando Barroso, Sr. appeared in federal court Thursday and admitted to receiving kickbacks totaling more than $1.2 million while working as the master scheduler for the Public Works Department at the Naval Base.

The 69-year-old Oxnard man was the "approving official" responsible for material purchases, service contracts, as well as paying vendors within three facilities: Point Mugu, Port Hueneme and San Nicolas Island.

Barroso also pleaded guilty to one count of conspiracy and one count of subscribing to a false federal income tax return. As part of the conspiracy, Barroso admitted he defrauded the United States, submitted false claims for payment and accepted bribes.

Court documents showed that Barroso conspired with Theodore Bauer, a Ventura County businessman, who operated three entities that received contracts from the Navy.

In 2008, Barroso and Bauer entered into an arrangement in which Barroso would issue and approve work orders and purchase orders for Bauer’s companies. Bauer then submitted false invoices on behalf of his companies, and Barroso approved invoices and payments to Bauer’s companies – even though work was not being performed.

In return, Bauer gave Barroso 50 percent of all proceeds generated by the scheme.

Prior to September 13, 2011, Bauer paid Barroso in cash – a figure that exceeded $375,000.

Beginning on September 14, 2011, when Barroso created F. Barroso & Sons, Bauer paid the kickbacks by issuing checks payable to Barroso’s corporation.

In December 2013, Barroso purchased a majority stake in a maintenance company, and Bauer paid kickbacks in the form of checks to that company as well. The total amount of kickbacks paid by Bauer to Barroso in the form of checks was $856,350.

In his plea agreement, Barroso also admitted that he violated government procurement regulations and violated conflict of interest laws by approving contract payments to the maintenance company he controlled. Barroso further admitted that some of the invoices issued by the maintenance company were simply fraudulent.

In relation to the tax offense, Barroso admitted that he failed to report $95,200 of kickbacks on his 2011 tax return, and that he claimed $331,225 of fictitious deductions on his 2012 tax returns. These violations caused a tax loss to the government of $105,039.

Sentencing is set for June 3, at which time, Barroso will face a statutory maximum sentence of eight years in federal prison and a fine of $500,000. He may also be ordered to pay restitution of $846,150 with respect to the bribery offense and $105,039 in relation to the tax offenses.

Bauer pleaded guilty in November to conspiracy to commit bribery and is scheduled to be sentenced June 10.

The case is a product of an investigation by IRS Criminal Investigation, the Defense Criminal Investigative Service, and the Naval Criminal Investigative Service.

Assistant United States Attorney Daniel J. O’Brien of the Public Corruption and Civil Rights Section is prosecuting the cases against Barroso and Bauer.

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