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Businessman faces prison sentence after admitting defrauding the government

ALBUQUERQUE, N.M. — An El Paso businessman pleaded guilty in federal court in Albuquerque to defrauding the government out of millions of dollars through contracts involving the now closed Big Crow Program Office based a Kirtland Air Force Base.

Arturo Vargas, 55, pleaded guilty Wednesday before U.S. Magistrate Judge Kirtan Khalsa to one count of conspiracy to defraud the government by submitting false invoices for work that wasn’t performed for the Big Crow Program Office.

The program office originally oversaw electronic warfare experiments for the Department of Defense and other agencies. But the conspiracy charge Vargas pleaded guilty to involved a contract with the Department of Interior.

According to the plea agreement, Vargas will be sentenced to a term of imprisonment within the range of 0 to 21 months. He faced a potential 10-year prison sentence.

Vargas’ business partner, Jose Diaz, 59, also of El Paso, pleaded guilty and admitted his involvement in the fraudulent scheme in April.

Diaz pleaded guilty to three counts, a conspiracy charge and two fraud charges, and acknowledged the criminal conduct attributed to him in the indictment.

Sentencing dates for the two men have not been scheduled.

In aggregate, Diaz and Vargas fraudulently claimed and obtained payments under the contracts totaling more than $5.8 million for lobbyists, consultants and unauthorized contractors, according to the indictment.

Diaz, Vargas and their co-defendants, Milton Boutte, 73, of Moriarty, and George Lowe, 56, of Fort Washington, Md., were indicted last November.

Boutte and Lowe have pleaded not guilty and have been seeking dismissal of the charges.

The 46-count indictment charged them with submitting fraudulent invoices to federal agencies and fraudulently participating in a government program intended to promote minority-owned small businesses so lobbyists could be paid from a contract that didn’t allow paying lobbyists.

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