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CEO pleads guilty to defrauding U.S. Army

The president of a Texas company pleaded guilty Wednesday to charges of defrauding a U.S. Army program based at Kirtland Air Force Base by hiding payments to a Washington lobbyist who prosecutors allege was illegally hired to get funding from the program.

Jose Diaz, president and CEO of MIRATEK Corp., received a $1.3 million federal contract to provide technical and support services to the Big Crow Program Office.

In his guilty plea, Diaz, 58, admitted diverting money from the contract to pay a lobbyist who was securing funding for the Big Crow program – originally intended to use two aircraft in electronic warfare testing.

Diaz also admitted to participating in creating phony invoices to continue the scheme through a second company.

In a series of admissions, Diaz detailed how the company created and submitted phony invoices to cover up the payments to the lobbyist, George Lowe, 55, of Fort Washington, Md., who has pleaded not guilty to charges of participating in the scheme.

More than $500,000 of the contract was allegedly used to pay Lowe, a lobbyist, and his firm, Broadcreek Associates, even though lobbying was not within the scope of MIRATEK’s contract.

Milton Boutte, 72, who headed the Big Crow Program Office, and Arturo Vargas, 54, of El Paso are also charged in the indictment with conspiracy to defraud the government, among other charges, and have pleaded not guilty.

Diaz pleaded guilty to one count of conspiracy to defraud the federal government and two counts of fraud, with each count carrying a potential 10-year prison sentence.

Sentencing for Diaz has not been scheduled.

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