Former government employee for Navy accused of taking kickbacks from sub-contractors

Posted at 10:55 PM, Mar 14, 2017
and last updated 2017-03-15 10:20:44-04

NORFOLK, Va. - New court records give insight into a federal investigation involving a former government employee.

The employee was once in charge of a $200 million budget for the Navy and is now accused of using his position to try and make money for himself.

According to court records, 56-year-old William Hutsenpiller is accused of taking kickbacks from subcontractors for several years.

They are the same companies hired to do work for the military.

Millions of dollars are spent fixing and maintaining military ships.

Between 2009 - 2013 Hutsenpiller was the civilian GS-15 Financial Department Head for the Norfolk Ship Support Activity which has been renamed to the Mid-Atlantic Regional Maintenance Center.

He was in charge of the operating budget for payroll, facilities, overtime, travel and leave, it states.

But now he is facing a charge of conspiracy to receive gratuities by a public official after questions came about regarding alleged kickbacks and the whereabouts of 5.1 million dollars.

We sat down with legal analyst Sonny Stallings who has 40 years of legal experience to give News 3 insight into the new court records.

“I think the wheels came off the wagon before he could retire. The audit came along, questions came along and being asked. The FBI and the NCIS agents started putting two and two together,” said Stallings, “It's an elaborate kickback scheme.”

Records state that from in or around March 2010 until September 2014 Hutsenpiller, along with the heads of other subcontractor companies “knowingly and willfully conspired and agreed together with each other."

The other subcontractors and people allegedly involved are not named in the documents.

It states they would work together to “participant in various illegal schemes to include holding government funds that should have been returned to the U.S. Government.”

“Toward the end of 2013, approximately $5.1 million dollars of unexpended Government funds remained under the custody [of the sub-contractors]" according to the records.

It states, “Approximately $2.4 million of the $5.1 million dollars of unexpended Government funds were specifically directed to Firm G [the unnamed sub-contractor] by Hutsenpiller for the purpose of his retirement.”

It states he was supposed to get a job with the sub-contractor after his retirement and get paid $150,000 a year and “this pending salary was to be paid out of the approximately $2.4 million of excess government funds,” but records indicate he never received the money or a job with the sub-contractor.

For a three year period unnamed subcontractors paid for Hutsenpiller’s cell phone, his wife’s phone, and many other electronics- totaling over $35,000 dollars, the record states.

An audit conducted by the Navy uncovered millions of dollars in charges were that weren’t allowed, records state.

It states the others involved created fictitious invoices using a limited liability corporation but Hutsenpiller didn’t have knowledge of this.

“Obviously, there's a lot of other people involved in this and a lot of money involved,” said Stallings, “It’s big dollars.”

Hutsenpiller worked as a civilian for the Norfolk Ship Support Activity and then was reassigned to Fleet Forces Command until he retired in 2015.

The allegations have just come to light.

We reached out to his lawyer, Larry Woodward who told News 3 he had no comment about the case.