National Aeronautics and Space Administration
Office of Inspector General
Washington, D.C. 20546

RELEASE: 2001-001

On October 2, 2000, American Research Corporation of Virginia
(ARCOVA), Radford, Virginia, pled guilty to a one count violation of
Title 18, United States Code, Section 1343, Wire Fraud. An Information
presented before the United States District Court, Western District of
Virginia, charged that from the fall of 1994 to July 1996, ARCOVA
defrauded NASA and the United States Navy by mischarging contractual
labor hours. It was charged that in furtherance of the fraud, the
corporation caused an interstate wire transfer of Government funds. As
part of the plea agreement, ARCOVA will pay restitution totaling

Sentencing is scheduled for January 10, 2001. The offense carries a
maximum penalty of a fine of $500,000.

ARCOVA contracted with various departments and agencies of the
Government to perform research projects involving engineering,
computer-based or scientific expertise. The types of contracts the
corporation principally obtained from the Government were through the
Small Business Innovative Research Program.

Special Agents from the NASA Inspector General’s Office of Criminal
Investigations, the Defense Criminal Investigative Service, and the
Federal Bureau of Investigation conducted the investigation. The
prosecution is being handled by Assistant United States Attorney Karen
B. Peters, Western District of Virginia, Roanoke, Virginia (540) 857-

For more information on this release, please call Samuel Maxey,
Assistant Inspector General for Investigations at (202) 358-2580.