Wife pleads guilty in alleged Iraq fraud - Marine Corps News | News from Afghanistan & Iraq - Marine Corps Times

Wife pleads guilty in alleged Iraq fraud

OCEANSIDE, Calif. — A Marine captain’s wife on Thursday pleaded guilty to a federal felony charge of filing a false income tax return in connection to her alleged role in an Iraq contracting scheme with her husband that reportedly netted them $1.75 million.

Janet Schmidt will return to U.S. District Court in Riverside, Calif., on June 7 to be sentenced before U.S. District Judge Virginia A. Phillips, said U.S. Attorney’s Office spokesman Thom Mrozek.

On March 4, federal prosecutors had charged Janet Schmidt and her husband, Capt. Eric Schmidt, both 39 and of Murrieta, Calif., with two counts of filing a fraudulent tax return and conspiracy to commit wire fraud. The charges would carry a maximum sentence of 23 years in prison.

Capt. Eric Schmidt, 39, who is assigned to 1st Marine Division at Camp Pendleton, will appear in court at a separate hearing scheduled for April 2.

Attorneys representing the Schmidts had filed separate plea agreements with the court on March 12. U.S. District Court Judge Virginia A. Phillips sealed both records at the government’s request.

It wasn’t clear whether prosecutors would drop the wire fraud charge against Janet Schmidt in exchange for her guilty plea. Mrozek said he could not comment on details of her plea agreement, which remained sealed.

The tax fraud violation carries a maximum punishment of three years and a $250,000 fine, according to Internal Revenue Service rules.

Federal prosecutors allege the couple skimmed $1.75 million from military contracts he handled while serving as a contracting officer’s representative in Iraq during his yearlong assignment. They claim Eric Schmidt steered contracts toward favored companies while his wife crafted false invoices for inflated contracts on such things as gym equipment for Marines and first aid kits, according to documents filed with the court .

The government already seized $40,000 in cash and two properties, including property at Big Bear resort northeast of Los Angeles, purportedly bought with proceeds of the scheme.

For more on the alleged plot pick up an issue of this week’s Marine Corps Times.