Ex-military contractor pleads not guilty to fraud

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Associated Press

Posted on December 19, 2012 at 10:01 AM

LOUISVILLE, Ky. (AP) — A former military contractor pleaded not guilty Tuesday to writing a federal contract and creating a job with a private company at Fort Knox that ultimately worked to his financial benefit.

The contractor, 65-year-old Gary T. Meredith of Leitchfield, also faces a civil suit from the federal government that, like the indictment, accuses him of manipulating an energy conservation contract to his benefit. Prosecutors say Meredith steered hundreds of thousands of military contracting dollars to his own company in an effort to create a lucrative retirement for himself.

Prosecutors say Meredith made $653,428 for his work as a subcontractor on a deal he helped write on behalf of the government with Nolin Rural Electric Cooperative.

U.S. Magistrate Judge James Moyer released Meredith without bond after arraignment in federal court in Louisville. A trial is set for Feb. 13.

"The court sees no reason he would represent a risk of flight," Moyer said.

Meredith is charged with committing acts affecting his personal financial interest and eight counts of wire fraud.

Meredith worked from 1987 through 2007 as the energy program director at Fort Knox, with the job of finding ways for the military post to conserve energy. From 1996 on, Fort Knox worked with Nolin Rural Electric Cooperative on the program. Meredith retired as a civilian employee with the U.S. Army in August 2007 and immediately went to work for Nolin, using the same office and computer at Fort Knox he had while serving in the military.

Two years earlier, Meredith created and signed a deal creating an energy savings program and sent the request for proposal to Nolin. The Army awarded the $2 million deal to Nolin in October 2007, with Meredith and his company, Meredith & Co., making $200,000 off of the contract he created.

Federal prosecutors say Meredith spent nearly two years negotiating with Nolin before retirement and had been talking with the company about a job when he wrote the contract and took the position he ultimately created.

In court, Meredith declined to specifically address the charges. He answered "Yes, your honor" to questions from Moyer about his legal rights, but otherwise stood mute next to his attorney, Roger Rigney of Elizabethtown.

Defense Criminal Investigator Jared Camper wrote in an affidavit that, in September 2006, Meredith orchestrated an illegal payment of $582,329 to Nolin to fund his future job with the company. The money should have gone to LG&E, a utility that had been working with Fort Knox on the energy savings program at the time. Three months later, while still working for the government, Meredith founded Gary Meredith & Associates, the entity he later used to obtain the job at Fort Knox on subcontract from Nolin. Fort Knox officials didn't become involved in creating what would become Meredith's job until December 2006.

When Nolin advertised the job at Fort Knox in September 2007, only Meredith applied. Nolin's Vice President of Operations, Vince Heuser, told Camper that he told Meredith about the advertisement, which had been placed to make the job look legitimate, but didn't notify anyone else.

Nolin paid Meredith $653,428 for the job between Oct. 16, 2007 and Aug. 29, 2011.

The lawsuit filed in federal court in Louisville in July seeks to prevent Meredith from spending any more of the money and recover what he had been paid. U.S. District Judge John G. Heyburn II issued an injunction stopping Meredith from spending any money he received from the contract. In court documents, Heyburn indicated that Meredith and the government are in settlement talks to resolve the lawsuit.

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Follow Associated Press reporter Brett Barrouquere on Twitter: http://twitter.com/BBarrouquereAP

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