Robert J. Stein Jr., 50, from Hope Mills, is accused of helping an American contractor illegally win bids in Iraq worth more than $13 million, federal authorities said this week. He faces conspiracy, money laundering, wire fraud and other charges.
Court records covering 25 years show a decorated military career that includes time spent with the Army's secretive Delta Force. They also reveal numerous suits against Stein dating back to a court-martial in 1980 for collecting a few hundred dollars in benefits for a woman he claimed was his wife. They weren't married.
Records also reveal debts, allegations of embezzlement and, when convicted of fraud in 1996, mental and emotional problems that required treatment.
His past raises questions of why U.S. authorities in Iraq put him in charge of $82 million in reconstruction money after the invasion in 2003.
As of Friday, the Department of Defense was not able to say how Stein was hired in Iraq, or whether he had undergone a background check.
Not long before Iraq's Coalition Provisional Authority gave Stein control of the money, he was involved in a similar scheme on a building project at Pope Air Force Base, The Fayetteville Observer reported.
A civil suit claims he conspired with subcontractors to skim $700,000 from a private construction company. The case was making its way through Cumberland County courts while Stein worked in Iraq.
Court records show a general contractor from Florida hired Stein in September 2000 as superintendent to build the headquarters for the 18th Air Support Operations Group. The suit alleges that Stein and four other people he hired over a year inflated labor costs and diverted funds totaling $700,000.
The suit says that Stein allowed one of his subcontractors to overcharge on labor costs in exchange for money, an allegation that echoes the charges from Iraq.
Grundy Marine Construction Co., the general contractor, sued Stein in 2003. Vice president Peter Caruk said he lost $1.5 million by the time the 30,000-square-foot building was finished.
The company dismissed the suit in September 2004 after Stein agreed to pay a $75,000 settlement, Caruk said.
"I've been in the construction business for 35 years and never been conned," Caruk said. "He (Stein) is the best con man I've ever come across."
In the Iraq case, prosecutors say Philip H. Bloom, 65, a U.S. citizen who has lived in Romania for many years, paid kickbacks of more than $630,000 to Stein and others. Bloom has been charged with conspiracy and money laundering stemming from an investigation that Justice Department officials say could result in additional charges against others.
Stein allegedly used some of the kickback money to make a restitution payment for his earlier fraud conviction and his wife used some to pay federal taxes, according to a federal affidavit.
Stein and his wife bought real estate, cars, jewelry and home improvements with the money, according to federal affidavits made public Wednesday and Thursday. He and other CPA officials allegedly helped rig bids for Bloom and three companies he controlled for contracts to do work in Al-Hillah and Karbala, two cities 50 to 60 miles south of Baghdad.
In early 2003, months before Stein went to Iraq, he faced another allegation of financial theft.
An insurance company accused him of trying to recoup nearly $48,000 that Stein had allegedly taken from another general contractor, Virtexco, based in Norfolk, Va.
Court records say Stein, who was in charge of ordering supplies, diverted shipments and resold them for profit, according to the suit filed in Wake County Superior Court.
Stein is being held by federal authorities, though it was unclear where.
A note taped to the door of Stein's Fayetteville home said "No press please!" A sport utility vehicle with a military-decorated license plate sat parked in the driveway with a business card from an agent of the Department of Homeland Security tucked under a windshield wiper.
U.S. Rep. Mike McIntyre, D-N.C., said Congress will hold additional oversight hearings early next year to determine how someone with Stein's record ended up awarding contracts in Iraq. McIntyre said the investigation into bid-rigging is not over.