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Submarine kickbacks: Two years, but no jail

By MICHELLE R. SMITH Associated Press

Publication: The Day

Published August 17. 2013 4:00AM
AP Photo
Ralph Mariano Jr. received home confinement for tax evasion stemming from a kickback scheme that cost the U.S. Navy $18 million.

Providence - An 82-year-old man convicted of tax evasion was sentenced Friday to two years of home confinement for his role in a kickback scheme that cost the U.S. Navy $18 million.

The judge said she spared Ralph Mariano Jr. prison time because of his age and because it would cost taxpayers more to keep him behind bars.

Mariano, of North Providence, is the father of one of the scheme's admitted ringleaders, Ralph M. Mariano, a former civilian employee of the Naval Undersea Warfare Center in Virginia. The younger Mariano has pleaded guilty to using his position to add money to contracts held by Georgia-based contractor Advanced Solutions for Tomorrow, or ASFT. In return, the contractor funneled kickbacks to the elder Mariano, corrupt subcontractors and others.

The elder Mariano is the first of six people convicted in the federal investigation into the scheme to be sentenced.

Prosecutors said he received $2.5 million in payments from a subcontractor over eight years. He was charged only for the years 2006 through 2009, and received $1.4 million during that time, never reporting the income on his tax returns. Prosecutors calculated that he failed to pay $488,000 in federal taxes during those years.

During Friday's sentencing hearing, U.S. District Judge Mary Lisi asked Mariano why he evaded taxes. He said he had retired with no pension, then acknowledged that he had lost hundreds of thousands of dollars gambling.

The others who have pleaded guilty in the case are Mariano's son; the son's girlfriend, Mary O'Rourke, a former executive based at ASFT's office in Middletown, R.I.; ASFT's founder, Anjan Dutta-Gupta of Roswell, Ga.; former ASFT executive Patrick Nagle of Marietta, Ga.; and ASFT subcontractor Russell Spencer. ASFT has gone out of business.

The five are scheduled to be sentenced in federal court in Providence in October.

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