Couple Indicted on Charges they Steered State Dept. Contracts to Their Company

They bought a boat, house and Lexus with the proceeds, indictment claims

Thursday, Apr 25, 2013  |  Updated 7:14 PM EDT
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Feds: Couple Steered State Dept. Contracts to Themselves

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A State Department employee and her husband have been indicted by a federal jury on charges that they tried to steer more than $60 million in State Department contracts to a company that they ran.

The couple allegedly used the proceeds from the scheme to buy a 41-foot boat, a home, a penthouse condominium and a Lexus, according to a statement from U.S. Attorney Neil MacBride, of the Eastern District of Virginia.

Kathleen D. McGrade, 64, of Fredericksburg, was a contract specialist for the U.S. Department of State based in Arlington, controlling contracts including many for embassies around the world. The indictment alleges she steered contracts to a company called Sterling Royale Group, LLC.

Sterling was controlled by her husband, Brian C. Collinsworth, 46 and also of Fredericksburg, as well as by McGrade, the indictment claims. It also claims McGrade issued a contract that had an indefinite term -- and an indefinite amount of business -- to Sterling, while concealing her marriage and her involvement in the company from the State Department.

Sterling submitted invoices for $39 million in payment before the scheme was discovered, the U.S. Attorney's office said.

The couple face up to 20 years in prison if convicted.

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