Army Civilian Pleads Guilty to Conspiracy Involving Fort Drum Contracts

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Sign at the entrance to Fort Drum in the state of New York
Sign at the entrance to Fort Drum in the state of New York. (U.S. Army)

FORT DRUM — A Dexter woman who worked as a civilian contracting officer for the U.S. Army at Fort Drum pleaded guilty Tuesday to a federal charge that she accepted gratuities from her contractor boyfriend in exchange for taking official action on government contracts that benefited him.

Cindy McAleese, 57, pleaded guilty in U.S. District Court, Syracuse, to conspiracy to commit an offense against the United States.

According to a plea agreement filed with the court, McAleese sought and received things of value from local general contractor Sean O'Sullivan, including sports tickets, meals, sexual encounters, and time and attention, in exchange for her taking official action on Mr. O'Sullivan's behalf, such as providing Mr. O'Sullivan's company with government contracts and approving payment on those contracts.

She further admitted that she and Mr. O'Sullivan took steps to keep their relationship a secret from other officials at Fort Drum

O'Sullivan, Sackets Harbor, was co-owner of Sierra Delta Contracting LLC along with David M. Rose of Newport News, Virginia. They both pleaded guilty in federal court in March 2022 to conspiracy to commit wire fraud, admitting that they schemed to obtain government construction contracts at Fort Drum that were set aside for businesses owned and operated by disabled veterans.

Federal government agencies offer "set-aside" construction contracts to Service-Disabled Veteran-Owned Small Businesses, SDVOSBs, which must meet certain criteria, including that a military veteran with a disability rating incurred as a result of military service must own the majority of the business and personally manage and control its daily business operations.

Prosecutors said that Rose and O'Sullivan incorporated and co-owned Sierra Delta, a construction company. Although Rose is a service-disabled military veteran, O'Sullivan is not, according to prosecutors. O'Sullivan certified to federal agencies that Sierra Delta was a SDVOSB, falsely representing that Mr. Rose personally managed and controlled Sierra Delta's day-to-day business operations.

That certification was false, prosecutors said, because O'Sullivan, not Rose, fulfilled those roles. Rose lived in Virginia, where he had a full-time job unrelated to Sierra Delta, and O'Sullivan ran the business by himself in Jefferson County, with little input from Rose.

Sierra Delta bid on and received multiple construction contracts from the Army at Fort Drum and one construction contract from the U.S. Department of Transportation. All of the contracts were 100% set aside for SDVOSBs. These contracts were fraudulently obtained because Sierra Delta was not a SDVOSB, prosecutors said.

O'Sullivan arranged for Sierra Delta to hire SOS Inc. — O'Sullivan's own construction company — as the primary subcontractor on the set-aside contracts, enabling O'Sullivan to retain the majority of the profits generated by the contracts. O'Sullivan admitted that he received $345,271 in profits from the scheme. Rose admitted that he received $33,992 from his participation in the scheme.

Government agencies challenged Sierra Delta's SDVOSB status and questioned whether Rose managed the company on a day-to-day basis. In response, Rose falsely claimed that he "control(led) the long-term and day-to-day operations of Sierra Delta Contracting LLC," that he maintained Sierra Delta's "main office" in Virginia, that he worked on Sierra Delta business 25 hours a week and that O'Sullivan dedicated substantially less time to Sierra Delta. Rose knew these statements were false, according to prosecutors.

In a related matter, O'Sullivan also pleaded guilty to conspiring to commit an offense against the United States by offering and giving gratuities to McAleese. In pleading guilty, Mr. O'Sullivan agreed that he promised and provided things of value to McAleese, including sports tickets, meals, sexual encounters, and time and attention, for and because of official action taken by Ms. McAleese on Mr. O'Sullivan's behalf, such as providing Mr. O'Sullivan's company with government contracts and approving payment on those contracts.

Rose was sentenced Sept. 7, 2022, to a $2,000 fine and ordered to pay $33,992 in restitution. O'Sullivan is scheduled to be sentenced May 16.

Upon her guilty plea Tuesday, McAleese agreed to enter into the Providing Alternatives That Help (PATH) pretrial diversion program. The program, which is at least a year long and can be extended to up to two years, requires, among other things, that she commit no new crimes, participate in substance abuse treatment and counseling programs and perform community service. Her participation in the program will be overseen by a probation officer and will require at least quarterly appearances before a PATH team and a PATH judicial officer to ensure compliance with the program's terms.

If she successfully completes the program, she will be allowed to return to court and withdraw her guilty plea, at which time the indictment against her will be dismissed. If she fails to complete the program, she faces a term in prison of up to five years and up to a $250,000 fine.

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