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Prosecutions on upswing for U.S. money crimes in Iraq, Afghanistan

A Marine in Iraq sent home $43,000 in stolen cash by hiding it in a footlocker among American flags. A soldier shipped thousands more concealed in a stuffed toy animal. An embassy employee tricked the State Department into wiring $240,000 into his foreign bank account.

As the wars in Iraq and Afghanistan are scheduled to wind down, the number of people indicted and convicted by the United States of bribery, theft and other crimes involving funds intended for reconstruction in both countries is rapidly rising, said two government reports released Sunday.

"This is a boom industry for us," Stuart W. Bowen Jr., the special inspector general for Iraq reconstruction, said in an interview.

"Investigators and auditors had a productive quarter," said a report on the theft of Afghanistan aid by Steven J. Trent, who holds the same job for Afghanistan. His report covered August through October.

In the last 13 months, U.S. investigators in Iraq secured the indictments of 22 people for alleged aid-related offenses, bringing to 69 the total since the Special Inspector General's Office was created in 2004. Convictions stand at 57. Several hundred more suspects are under scrutiny in 102 open investigations, and those numbers are expected to climb.

The rise in caseloads derives partly from spinoff investigations, where suspects facing prosecution lead investigators to other suspects, said Jon E. Novak, assistant inspector general for investigations.

At the Special Inspector General's Office for Afghan reconstruction, created in 2008, officials report only nine indictments and seven convictions so far. They say they're trying to ramp up after years of upheaval and charges the office was mismanaged. Trent was named acting inspector general after his predecessor left in August and is the third person to hold the job.

Still, Trent reported that during the last quarter, an investigation initiated by his office netted the largest bribery case in Afghanistan's 10-year war. A former Army Reserve captain, Sidharth "Tony" Handa of Charlotte, N.C., was convicted, sentenced to prison and fined for soliciting $1.3 million in bribes from contractors working on reconstruction.

Most crimes uncovered by U.S. investigators in the two war zones include bribery, kickbacks and theft, inspired in part by the deep and pervasive cultures of corruption indigenous to the countries themselves.

Among cases listed in the reports were those of:

Gunnery Sgt. Eric Hamilton, who pleaded guilty to conspiracy in what prosecutors say was a scheme to help Iraqi contractors steal 70 generators that were meant to supply electricity for fellow Marines. He sent some of their payments home in a footlocker and had other money wired, the report said.

A former army sergeant, who was not identified, is charged with pocketing more than $12,000 in cash that a contractor never picked up after the money was allegedly stolen by another army sergeant and mailed to California inside a stuffed animal.

Jordanian national and U.S. Embassy employee Osama Esam Saleem Ayesh, who was convicted in April of stealing nearly $240,000 intended to cover shipping and customs charges the State Department incurs when it moves household goods of its employees. The money wound up in Ayesh's bank account in Jordan.

Money stolen from reconstruction projects also has been shipped off of U.S. battlefields tucked into letters home and stuffed in a military vest. Tens of thousands of dollars were once sewn into a Santa Claus suit.

More than $83 million will be returned to the United States from Iraq cases completed in the budget year that ended Sept. 30, bringing the total recovered over the last seven years to nearly $155 million, Bowen's office said.

The United States has committed $62 billion to rebuilding Iraq and $72 billion for the reconstruction of Afghanistan.

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