State Dep't Employee, Husband Defraud Government of $53 Million Through Lucrative Construction Contracts

By Penny Starr | September 3, 2013 | 5:09 PM EDT

Brian Collinsworth and Kathleen McGrade, convicted of $53 million in State Department contract fraud-related crimes.

( – A State Department employee and her husband have pleaded guilty to fraudulently acquiring $53 million in lucrative contracts, according to the United States attorney for the Eastern District of Virginia.

Last month the attorney general (AG) announced that Kathleen McGrade, 64, and her husband, Brian Collinsworth, 47, had pleaded guilty to fraud and other charges. McGrade, a contract specialist who awarded construction contracts for work done at U.S. embassies worldwide, gave the contracts first to a company where her husband worked and then to a company owned by the couple.

“Defendants McGrade and Collinsworth -- now convicted felons -- defrauded and stole from the American people, plain and simple,” U.S. Attorney Neil H. MacBride said in a press release issued about the case. “We, along with our law enforcement partners, are committed to ferreting out and prosecuting those that destroy the integrity of the government contracting process.”

McGrade and Collinsworth were indicted on April 25 by a federal grand jury on charges of conspiracy, major fraud against the government, wire fraud, false statements, and engaging in unlawful monetary transactions.  Each defendant faces a maximum penalty of 30 years imprisonment when they are sentenced on Nov. 8, according to the press release.

One of the homes owned by convicted fraud felons Kathleen McGrade and Brian Collinsworth. (AP)

The couple, residents of Stafford, Va., also lied to investigators about their marital status and about Sterling Royale Group, the company they started in 2006.

The couple will relinquish the assets they acquired including houses, a condominium, a yacht, a Lexus automobile, jewelry, and a Steinway piano, according to the press release.

The Department of State, Office of Inspector General, and the Global Illicit Financial Team, a task force led by the Criminal Investigation Section of the Internal Revenue Service, were in charge of investigating the case.

Assistant United States Attorneys Jack Hanley and Mark Lytle are prosecuting the case for the United States.

Court documents can be found on the website of the District Court for the Eastern District of Virginia.