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Feds file charges, seek yacht in State contract fraud probe

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Kathleen McGrade was a contract specialist inside the State Department, but prosecutors say she didn’t live like one.

Steering tens of millions of dollars in work to a company controlled by her husband, McGrade bought a yacht, penthouse condo and lots of jewelry, according to charges unsealed Thursday in U.S. District Court in Virginia.

McGrade, 64, and her husband, Brian C. Collinsworth, 46, both of Fredericksburg, Va., face up to 20 years in prison on charges stemming from what authorities called a “secret scheme” by the couple to steer more than $60 million to a company they controlled.

Authorities said McGrade was a private contract employee assigned to work as a contract specialist inside the State Department. Though she kept the relationship with her husband a secret from colleagues, she signed off on payments to her husband’s company, authorities said.

In forfeiture papers filed in U.S. District Court in Alexandria on April 2, prosecutors also said McGrade was “involved in nearly every stage” of the contracting process. They say the scheme lasted from December to 2007 until August 2011.

Prosecutors are seeking three properties tied to the scheme along with a Steinway piano, a yacht, artwork and jewelry that includes a matching sapphire and diamond necklace and bracelet set that cost $136,500.

A phone number listed for McGrade in Virginia was disconnected, and attempts to reach her were unsuccessful.

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Comments

  1. Procurement Analyst Says:
    April 26th, 2013 at 5:32 pm

    What the heck was she doing as a contractor performing inherently governmental functions? State is subject to the Federal Acquisiton Regulation. This is a violation of FAR 7.503(c)(12).