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FOR IMMEDIATE RELEASE CRM

MONDAY, SEPTEMBER 19, 2005 (202) 514-2008


WWW.USDOJ.GOV TDD (202) 514-1888

U.S. Army Contracting Director, Two


Other Individuals Arrested in
Connection
With Bribery and Kickback Scheme
WASHINGTON, D.C. - A civilian U.S. Department of Army Director of
Contracting and two other individuals have been arrested in New York and Indiana
on charges of participating in a scheme to pay bribes to a public official and take
kickbacks in connection with U.S. Army contracts awarded from an Army
recreational facility in Germany, Assistant Attorney General Alice S. Fisher of the
Criminal Division announced today.

Arrests were made Friday of Steven G. Potoski, 45, of Garmisch, Germany, a


civilian employee of the U.S. Army; Alvan Vance McQueen, 56, of Shelbyville,
Indiana, President and owner of Flat Rock Furniture; and Ellis Abramson, 39, of
Merrick, New York, President of Bramson House, Inc.

From August 1998 through July 2005, Potoski was a civilian employee of the U.S.
Army, serving as Director of Contracting for the Edelweiss Lodge and Resort,
Armed Forces Recreation Center (AFRC Europe), in Garmisch, Germany. The
Department of the Army serves as the executive agent for the AFRC Europe,
operating the AFRC Europe on behalf of the Department of Defense. Patrons at the
AFRC Europe include active duty U.S. military personnel serving in Afghanistan
and Iraq.

According to a criminal complaint filed in the Eastern District of New York,


Potoski admitted to investigators that while serving as Director of Contracting, he
accepted bribes from contractors and subcontractors for contracts related to work at
the AFRC Europe. According to the charges, Potoski and the contractors or
subcontractors agreed to fraudulently inflate the amount of certain line items on
contracts for the AFRC Europe, submit the inflated line items to Potoski for
approval, and split between Potoski and the contractors or subcontractors the
difference between the actual amount of the line items and the fraudulently inflated
amount. The complaint further alleges that Potoski accepted over $350,000 in bribes
from at least 15 contractors or subcontractors - two American contractors, 12
German contractors, and one British contractor.

The complaint alleges that Potoski accepted the bribes for himself, his family
members and others in the form of cash, home renovations, flat screen televisions,
computer laptops, automobile maintenance, airline tickets, hotel rooms, trips,
cleaning services, furniture, artwork, appliances, Oktoberfest tickets, tickets to the
Indianapolis 500, and ski passes. Potoski is formally charged with accepting bribes
in his capacity as a public official; accepting a kickback from a government
contractor or subcontractor, in violation of the Federal Anti-Kickback Act; traveling
in interstate or foreign commerce in aid of a racketeering enterprise; and
conspiracy. Potoski has cooperated in the government's continuing investigation of
the contractors and subcontractors.

McQueen, President and Owner of Flat Rock Furniture, Incorporated, in Waldron,


Indiana, is charged by criminal complaint in the Southern District of Indiana with
giving cash and other benefits to Potoski and a member of Potoski's family in return
for Potoski's agreement to fraudulently inflate certain line items by $80,000 in a
contract between Flat Rock Furniture and the AFRC Europe to supply it with
furniture. According to the criminal complaint, McQueen paid Potoski
approximately $45,000 in cash and provided other things of value to Potoski,
including hotel rooms, airfare, and tickets to the Indianapolis 500, in return for
Potoski's agreement to approve the fraudulently inflated contract and split the
fraudulently inflated amount with McQueen. According to the complaint, McQueen
also passed $100,000 in cash to an undercover agent posing as Potoski's successor
as part of a separate scheme to inflate certain line items by $200,000 in a purported
contract between McQueen's company and the AFRC Europe. McQueen is charged
with: paying bribes to a public official; paying a kickback, in violation of the
Federal Anti-Kickback Act; structuring a currency transaction to evade reporting
requirements; and conspiracy. In connection with McQueen's arrest, a search was
conducted Friday at the offices of Flat Rock Furniture, Incorporated, in Waldron,
Indiana.

Abramson, President of Bramson House, Inc., in Freeport, New York, is charged


with paying $23,000 in cash to Potoski in return for Potoski's agreement to
fraudulently inflate certain line items in a contract between Bramson House and the
AFRC Europe to provide it with draperies and guest room bed spreads. According
to a criminal complaint filed against Abramson in the Eastern District of New York,
during a telephone call overheard by undercover agents, Abramson also agreed to
pay Potoski an additional $20,000 to $30,000 as part of a separate scheme to inflate
certain line items in a purported contract between Abramson's company and the
AFRC Europe. Abramson is charged with paying bribes to a public official; paying
a kickback, in violation of the Federal Anti-Kickback Act; traveling in interstate or
foreign commerce in aid of a racketeering enterprise; conspiracy. In connection
with Abramson's arrest, a search was conducted Friday at the offices of Bramson
House, Inc., in Freeport, New York.
"Americans will not tolerate corruption of public officials, particularly those who
corruptly put into their own pocket money intended for the benefit of American
soldiers," said Assistant Attorney General Fisher. "Today's announcement should
send an unmistakable message that we will act locally, globally and proactively to
root out corruption of government officials."

If convicted, Potoski, McQueen and Abramson each face a maximum sentence of


15 years in prison on the bribery charge, 10 years in prison on the Anti-Kickback
charge, and five years in prison on the conspiracy charge. Potoski and Abramson
face a maximum sentence of five years in prison on the interstate or foreign travel in
aid of racketeering charge. McQueen faces a maximum sentence of five years in
prison on the structuring charge. The government also intends to seek the forfeiture
of proceeds allegedly used and obtained during the commission of these offenses.

The case was investigated by the U.S. Army Criminal Investigation Division
Command and the Internal Revenue Service-Criminal Investigations. It is being
prosecuted by Deputy Chief Mark F. Mendelsohn and Trial Attorney Michael K.
Atkinson of the Fraud Section of the Criminal Division at the U.S. Department of
Justice, Washington, D.C., with assistance from Steve DeBrota, Assistant United
States Attorney, Southern District of Indiana, and Cynthia Monaco, Assistant U.S.
Attorney, Eastern District of New York. The investigation is continuing with the
assistance of foreign law enforcement agencies.

The charges against the defendants are allegations only and the defendants are
presumed innocent until and unless convicted at trial.

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