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A former US Air Force master sergeant has pleaded guilty to orchestrating a multi-million-dollar scheme to inflate military IT contracts.

Getting into it: According to the DOJ, Alan Hayward James (who referred to himself as “Al Capone” in his own records) admitted he was part of a long-running fraud scheme that lasted from about 2016 to 2025. During that time, he was actively serving in the Air Force and responsible for helping create and manage IT contracts for bases across the Pacific, using that position to secretly manipulate how contracts were priced and awarded. In total, the scheme caused the Air Force to overpay by at least $37 million.

At a basic level, what he did was make contracts look more expensive than they really were. He worked with outside companies and told them how to bid so that certain companies would win. Some were told to bid high, others were told to submit weak or losing bids, so the “chosen” company would get the contract at an inflated price. The extra money built into those contracts didn’t go toward real work but instead became profit that he and his co-conspirators split, with James personally receiving payouts through the scheme.

To hide the money, they routed it through shell companies, and from there, the money was paid out as fake “salaries” or consulting fees to people who weren’t actually doing any work. This included payments to himself, his family members, and others involved in the scheme, with individual payouts sometimes ranging from around $10,000 to $200,000. According to the FBI, James kept ledgers with code names to track who got paid and how much.

James is facing up to 20 years for wire fraud, 15 years for bribery, and 10 years for bid-rigging, although the final sentence will be decided by a judge. He has also agreed to pay at least about $1.45 million in restitution to the US government, even though the total fraud amount was far higher.

In a statement, U.S. Attorney Ken Sorenson for the District of Hawaii said, “Through this bid-rigging scheme, the defendant not only stole from American taxpayers and harmed companies seeking to compete honestly for government contracts, he also ultimately harmed essential military services designed to keep our nation safe by diverting resources away from other services. Bid-rigging and anti-competitive behavior in government contracts erodes trust in our institutions, harms taxpayers, and will not be tolerated. We will continue to investigate and prosecute any and all who would seek to manipulate markets and undermine fair competition for their own personal gain.”