Chad Eric O’Kelley, Former Employee of a Nevada-Based Defense Contractor, Indicted by a Federal Grand Jury in El Paso for Conspiracy and Money Laundering Conspiracy

AP on June 10, 2011 released the following press release:

“RENO, Nev. (AP) — A former employee of a Nevada-based defense contractor has been indicted on charges that he conspired with others to steal U.S. military ammunition in Iraq and then sell it back to Iraqis and U.S. forces.

Chad Eric O’Kelley was released on his own recognizance after being arrested at his Carson City home and making an initial appearance Thursday in U.S. District Court in Reno on charges of conspiracy to defraud the U.S. government and money laundering.

A federal grand jury indictment alleges O’Kelley was a manager in Baghdad with defense contractor Security Operations Consulting in early 2007 when he conspired with others to steal and sell the ammo and send cash shipments to the U.S. via Federal Express or couriers.

O’Kelley – whose job was to ensure that all bases of operation in Iraq under contract with SOC had ammunition and other supplies – at times sold the ammunition back to the U.S. and coalition forces effectively requiring the government to pay for the ammunition twice, federal prosecutors contend.

The indictment also alleges that O’Kelley and others shipped bulk currency, more than $10,000 at one time, derived from the sales in Iraq to the U.S. to distribute among the conspirators.

After being promoted in August 2007 to manager of Iraq operations at SOC’s headquarters in Minden, O’Kelley is accused of continuing to receive proceeds from the scheme. The indictment alleges he made four structured cash deposits totaling $34,600 into an El Paso, Texas, bank account to avoid financial transaction reporting requirements.

The total amount of money involved in the scheme that purportedly ended in 2008 has not been publicly disclosed, said Daryl Fields, spokesman for the U.S. Attorney’s Office in San Antonio.

“This case identified an illegal scheme and vulnerability that seriously threatened homeland security,” said Manuel Oyola-Torres, special agent in charge of the U.S. Immigration and Custom Enforcement’s Homeland Security Investigations in El Paso, whose agents arrested O’Kelley.

Homeland Security Investigations uses other agencies to “identify, arrest and help prosecute individuals who take advantage of their positions to fraudulently obtain ammunition and equipment directly from the U.S. government for personal gain,” he added.

O’Kelley, 40, was ordered to appear in federal court in Texas, where he used to live in El Paso. No date has been set yet.

There’s no home phone number listed for O’Kelley. Phone calls to both SOC spokesman Robert Killion and the assistant federal public defender who represented O’Kelley at Thursday’s hearing, Ramon Acosta, were not immediately returned Friday.

Other alleged conspirators mentioned in the indictment have neither been identified nor indicted, Fields said. Asked whether the government considers O’Kelley the leader of the alleged conspiracy, Fields replied, “I would say that’s a safe assumption.”

O’Kelley was ordered to surrender his passport and to restrict his travel to the U.S. by U.S. Magistrate Judge Valerie P. Cooke at Thursday’s hearing in Reno.

He will not enter a plea until the court hearing in El Paso.

If convicted, he faces up to 20 years in prison on the money laundering charge and five years for conspiracy to defraud the U.S. government. Prosecutors also are seeking the forfeiture of any proceeds from the scheme.

The investigation was conducted by ICE Homeland Security Investigations agents assigned to the Southwest Border Financial Operations and Currency Unified Strike Force and the Defense Criminal Investigative Service’s Office of the Inspector General in El Paso.”

Attached is Chad Eric O’Kelley’s Indictment

To find additional federal criminal news, please read The Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN List Removal.

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