A federal grand jury has indicted three current and former Marine Corps officers for fraud involving a bid proposal for maintenance on helicopters in Marine Helicopter Squadron One (HMX-1) that provides helicopter transport to the President, among other duties.
A five-count indictment charged Craig Kolhagen, Dennis Pennington, and James Bowling with conspiracy to commit wire fraud, major fraud against the government, and procurement fraud.
Kolhagen, a Marine Corps officer, was the contracting officer’s representative for the HMX-1 squadron. Bowling and Pennington are retired officers who served as helicopter mechanics during their military careers. Currently, Pennington is chief executive officer and Bowling is president of Valour, LLC, a Louisiana-based defense contractor engaged in the business of helicopter repair for the military.
The indictment alleges that Kolhagen illegally leaked confidential information regarding the cost of a proposed contract for the maintenance of HMX-1 helicopters. In turn, Pennington and Bowling colluded with Kolhagen to artificially inflate the cost estimate of the bid proposal and to draft the proposed contract’s statement of work and technical requirements in a way to favor Valour over other potential bidders, according to the indictment.
The charges stem from activity from 2011 to Dec. 2013. The Naval Criminal Investigative Service (NCIS) and the Defense Criminal Investigative Service (DCIS) are investigating the case.