Guilty pleas in State Department contract scam


A former State Department contract employee and her husband pleaded guilty Friday to fraud and conspiracy charges in a scam to steer tens of millions of dollars in embassy construction contracts.

Kathleen D. McGrade, 64, and Brian Collinsworth, 47, face up to 30 years in prison after their pleas in U.S. District Court in Alexandria, Va. A sentencing date is set for Nov. 8.

In plea documents, both admitted that McGrade, as contract specialist for the State Department, steered nearly $40 million in embassy construction work from 2008 to 2011 to her husband’s company, while keeping  their marriage a secret from coworkers.

The contracting company that reaped the windfall, the Sterling Royale Group, had been launched with McGrade as the own and Collinsworth as project manager, according to prosecutors.

“The scope and breadth of this fraud is reprehensible, not just because of the dollars involved, but because of the position of trust that Ms. McGrady held,” said Thomas J. Kelly, special agent in charge of the IRS criminal section in the Washington field office.

Federal Times reported in May how the McGrade case highlighted the varying ethics rules between government workers and contract employees.


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