Navy subcontractor pleads guilty in bribe case

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Navy subcontractor pleads guilty in bribe case

A Navy subcontractor pleaded guilty Friday in Rhode Island for his part in what federal prosecutors say was a kickback scheme that cost the Navy millions of dollars.

Russell Spencer's plea was part of an agreement with prosecutors in which he promised to cooperate with authorities as he has been since investigators approached him in June 2010.

Spencer, 56, pleaded guilty to conspiring to commit bribery in helping funnel money, through his businesses, from a Navy contractor to a civilian Navy employee who prosecutors say then bumped up funding to the contractor. Prosecutors say the scheme cost the Navy between $7 million and $20 million.

The case prompted an internal Navy investigation that resulted in military officials in Washington suspending the contracting authority of Newport's Naval Undersea Warfare Center. The Navy said a host of contracting problems at the facility enabled the scheme.

According to the government, Ralph M. Mariano of Arlington, Va., who worked at the warfare center, initiated the scheme by threatening to use his position to reduce funding for contracts held by Advanced Solutions for Tomorrow if company owner Anjan Dutta-Gupta didn't kick back money to Mariano.

Dutta-Gupta, of Roswell, Ga., has pleaded guilty to paying $8 million in bribes over more than a decade. Mariano has been charged, but not indicted. He has declined to comment on the allegations, and remains free on bond.


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Workers’ Compensation Subrogation of Administrative Fees and Costs

When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.

In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.

In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.

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