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Former National Sciences Foundation Employee Pleads Gulity to Lying on Financial Disclosure & Taxes | Crime

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Former National Sciences Foundation Employee Pleads Gulity to Lying on Financial Disclosure & Taxes
Crime, People
Former National Sciences Foundation Employee Pleads Gulity to Lying on Financial Disclosure & Taxes

        Greenbelt, Maryland - Win Aung, age 72, of Potomac, Maryland, formerly a senior level employee at the National Science Foundation, pleaded guilty yesterday to making a false statement on his financial disclosure form to the National Science Foundation and filing a false tax return.

        The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Rebecca Sparkman of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office; and Allison Lerner, Inspector General for the National Science Foundation (NSF).             

        NSF Inspector General Allison Lerner stated, “This senior-level NSF executive abused his government position and violated the public trust when he repeatedly and deliberately failed to report outside income and interests on his financial disclosure to NSF. I commend the U.S. Attorney’s office for its strong support in this public integrity case.”

        “The role of IRS-Criminal Investigation, along with our fellow law enforcement partners, is important in embezzlement and fraud cases due to the complex nature of the financial transactions,” stated Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington DC Field Office. “As we often see, the victims are not only individual taxpayers but entities who suffer the financial harm.”

        According to Aung’s guilty plea, he was an NSF employee for more than 35 years, the last 18 years serving as a full-time Senior Staff Associate, Division of Engineering Education and Centers in the Directorate of Engineering.  On September 1, 2010, Aung resigned from NSF.

        In 2000, Aung founded the International Network For Engineering Education and Research (“iNEER”) and in July 2002, signed and filed Articles of Incorporation for iNEER with the State of Maryland, listing himself as the sole director and using his Potomac residence as the corporation’s principal office.  iNEER was formed purportedly to develop and sponsor international conferences regarding engineering education, and to issue publications relating to engineering education, among other things.  iNEER was to operate as a non-profit corporation.  According to iNEER’s by-laws, Aung held himself out as “Secretary-General,” responsible for implementing the corporation’s policies under the direction of a Board of Directors.

        Consistent with its stated mission, iNEER sponsored conferences, which generated registration fees, published and sold engineering books, and also solicited and received donations from corporate sponsors.  During 2002 through 2007, iNEER received income totaling more than $800,000 from those activities.

        Aung was permitted to spend corporate funds only for iNEER-related expenses.  In annual reports and elsewhere, Aung represented that he volunteered his time to iNEER, for which he received no compensation, and that he only received reimbursements for iNEER-related expenditures.  However, between October 2002 and December 2007, Aung wrote to himself more than two dozen checks totaling approximately $388,535 from the iNEER bank account.  Aung indicated on the checks and in other records that the funds represented reimbursement for iNEER-related expenses.  In fact, Aung reimbursed himself with more than $100,000 in iNEER funds for his personal expenses, including: family vacations, including trips to Bethany Beach, Delaware, Kennedy Space Center, Florida, and Hershey Park, Pennsylvania; personal gifts; an NSF fitness club membership; exercise equipment; daily parking at the garage located near NSF; a Combined Federal Campaign contribution; coffee and meals during duty days at NSF; health prescriptions; electronics, such as an LG 47" LCD flat screen television; and clothing.  In addition, Aung used iNEER funds for personal expenses associated with his residence, including: at least half of the costs associated with gas, electric and water utilities, newspaper and magazine subscriptions, phone service, cable service, a house cleaning service, and home insurance; at least $6,000 for lawn care and maintenance; home furnishings; installation of a new 75-gallon gas water heater; a  bidet; home repairs and maintenance; and half of his residential property taxes.

        Aung did not report this income on either iNEER’s corporate tax returns or his own individual income tax returns, both of which he filed annually between 2002 and 2007.  On iNEER’s corporate tax returns, Aung reported no compensation for officers and characterized his status as an unpaid volunteer.  Aung also filed personal income tax returns for tax years 2002 through 2007, but did not report as income the iNEER funds he used for personal expenses.

        From 2002 through 2007 Aung likewise concealed his iNEER compensation from NSF ethics officials, filing required financial disclosure reports which falsely characterized all funds he received from iNEER as reimbursements and travel expenses; he did not report any compensation from iNEER. For example, in his 2007 financial disclosure, Aung falsely characterized $96,000 in payments from iNEER as “reimbursements” for “office expenses, supplies, business meals, [and] local transportation.” Aung reported no compensation from iNEER even though he knew he had received compensation from iNEER. Whether or not Aung received compensation from iNEER was important to the decision of NSF ethics officials to permit Aung to assume and maintain his position with iNEER.

        Aung faces a maximum penalty of five years in prison for the false statement and a maximum of three years in prison for filing a false tax return.  U.S. District Judge Peter J. Messitte, has scheduled sentencing for May 17, 2011 at 9:30 a.m.

        United States Attorney Rod J. Rosenstein commended the National Science Foundation, OIG and the IRS-CI for their work in the investigation.  Mr. Rosenstein thanked Assistant United States Attorney Michael Pauzé, who is prosecuting the case.

Crime, People