Judge restricts travel for owner of company
Published Feb. 16, 2011
By Sean Flynn
Daily News staff
PROVIDENCE - Anjan Dutta-Gupta, accused of bribery in a $10 million kickback scheme involving Navy funds, made his first court appearance in Rhode Island Tuesday morning. His wife, Indrani, his two sons, an uncle and a nephew sat in the gallery behind him in a courtroom at U.S. District Court.
Attorney John E. MacDonald of Providence, one of two lawyers representing Dutta-Gupta, pointed out the family members to U.S. Magistrate Judge Lincoln D. Almond as reasons why his client presents no flight risk.
Dutta-Gupta, whose Advanced Solutions for Tomorrow Inc. had employed close to 100 people in Middletown, was arrested in Atlanta on Feb. 6. He appeared in U.S. District Court in Atlanta two days later and was released on a $25,000 unsecured bond after surrendering his passport. MacDonald said Dutta-Gupta, 58, is a U.S. citizen and has no passport from his native India. He never has been charged with any state or federal crime, MacDonald said.
Dutta-Gupta allegedly worked with Ralph M. Mariano, a civilian program manager and senior systems engineer with the Naval Sea Systems Command (NAVSEA) in Newport, to bilk the Navy of at least $13.5 million, according to an affidavit U.S. Attorney Peter Neronha filed in U.S. District Court in Providence. Of that amount, $10 million was funneled back to Mariano, his relatives and associates and Dutta-Gupta, the affidavit claims.
Mariano, 52, also has been charged with bribery. He appeared in U.S. District Court on Feb. 8.
Assistant U.S. Attorney Andrew Reich asked the judge Tuesday to require Dutta-Gupta to post an additional $15,000 secured bond and to increase the unsecured bond to $50,000. Reich also asked that Dutta-Gupta be subject to electronic monitoring and a curfew requiring him to stay in his home in Georgia from 10 p.m. to 6 a.m.
"He has family members in India and has traveled extensively internationally," Reich said.
The judge said a pre-trial report showed Dutta-Gupta has liquid assets of $20,000. Almond ordered him to pay $10,000 cash up front as surety and gave him one week to come up with the money. The judge also increased the unsecured bond to $50,000, but rejected the prosecutor's request for electronic monitoring and a curfew.
Attorney David M. Fragale of the Washington, D.C. law firm Steptoe & Johnson also is representing Dutta-Gupta. Fragale said his client is waiving his right to a preliminary hearing, in which the government would be required to present evidence and show probable cause.
Dutta-Gupta had trouble hearing Almond when the judge asked if he understood the purpose of a preliminary hearing, Before proceeding, Almond ordered he be provided with headphones to help him hear what was going on in the courtroom.
When the judge imposed travel restrictions limiting Dutta-Gupta to Georgia, Washington, D.C., and Rhode Island, he sought permission to drive to D.C. to consult with his attorney and to stay with his son while there. The judge approved the request but said Dutta-Gupta cannot linger at any stop along the way.
All travel arrangements must be cleared with the pre-trial services officer in Georgia, Almond said.
Dutta-Gupta's company, ASFT, had 10 outstanding contracts with the Navy, of which the biggest three had a value of about $128 million, the affidavit says.
The Navy suspended those contracts on Friday, said James Slater, deputy director of NAVSEA's office of corporate communications. The entire staff of ASFT, which had offices in Middletown, Fairfax, Va., and Roswell, Ga., was laid off on Monday and the company shut down.
Richard Kulesh, a systems engineer employed by ASFT in Middletown for more than five years, was the only employee in the courtroom on Tuesday.
"I would like to be able to tell Anjan how extremely disappointed in him the employees are," he said before the hearing began.
"We all did very good work and took extreme pride in what we did. I, my friends and coworkers are now in a very bad position. Working for the company was a high point of my career. Now, it's a blemish."
Kulesh, 37, a resident of North Kingstown, said he was working on a project to improve submarine telecommunications. He served on submarines and had a lot of practical experience, he said. The research had been done, the value of the prototype of the new technology had been proven, Kulesh said, and he expected his work on "submarine communications bandwidth optimization" to result in a $50 million Navy contract for the company.
"We had a very successful company until a week ago," he said. "Now, it's gone, and everything we were working on."
The 29-page affidavit submitted by Patrick J. Hegarty, special agent for the Defense Criminal Investigative Service, summarizes a four-year investigation into the alleged criminal activities of Dutta-Gupta and Mariano.
Much of the detail of their operations is attributed to an unnamed cooperating witness who owns two companies, C&S Technology and S.I. Technologies Inc., both with addresses at 11 King Charles Drive, Portsmouth, according to the affidavit. The Rhode Island secretary of state's database identifies the owner of C&S Technologies as Russell E. Spencer of Portsmouth, but his name does not appear in the affidavit. It refers to the owner of the companies as "CW1."
The affidavit says ASFT paid CW1's companies a total of $13.5 million. Those companies paid Mariano more than $4 million, his relatives and associates approximately $4 million, and about $2 million was funneled back to entities controlled by Dutta-Gupta, according to Hegarty's affidavit.
As a program manager, Mariano had authority to "add money to existing Naval contracts when warranted," Neronha said.
Because of the substantial amount of money being paid to Mariano and his relatives through CW1, agents approached him in June 2010. CW1, who agreed to cooperate in the federal investigation, said he, Mariano, Dutta-Gupta and another individual met at CW1's home in 1999. CW1 said he agreed to set up a company to provide sub-contract work to AFST and to assist Mariano and Dutta-Gupta in a scheme to provide illegal remuneration, mainly to Mariano and his relatives.
The company, C&S Technology, submitted invoices to ASFT "largely for work not performed," the affidavit says. ASFT would pay the invoices, and CW1 would make the payments to Mariano and Dutta-Gupta and the different entities controlled by them.
From 2006 to 2009, C&S Technnology paid more than $1 million to SIC, a company owned by Dutta-Gupta. In late 2009, Dutta-Gupta told CW1 he did not want any more money coming to him from C&S Technologies and asked him to set up another company to make the payments. CW1 incorporated S.I. Technologies in November 2009. The new company then submitted invoices weekly or bi-weekly to ASFT for work not performed, the affidavit says.
For example, from 2009 to the present, ASFT paid S.I. Technologies $275,000, the affidavit says. S.I. Technologies in the same time period paid SIC, Dutta- Gupta's company, "approximately $269,000 for no legitimate purpose," the affidavit says.
The affidavit lays out earlier payment schemes that followed the same model.

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