Chad O'Kelley
A September hearing is set in El Paso, Texas, for a Carson City business owner indicted by a grand jury on charges related to the alleged theft and resale of stolen U.S. military ammunition in Iraq.
A status check is set for Sept. 2 in the criminal case involving Chad Eric O'Kelley, owner of the Carson City Gold's Gym, according to the clerk's office of the U.S. District Court for the Western District of Texas in El Paso.
O'Kelley, 40, waived his personal appearance at an arraignment July 14 in El Paso, and a not-guilty plea was entered on his behalf, U.S. attorney's spokesman Daryl Fields said Friday.
Reached at his gym Monday afternoon, O'Kelley declined to comment.
He is charged with money laundering and conspiracy to defraud the U.S. The charges are the same as what the grand jury issued in May, said Fields.
According to the federal grand jury indictment, O'Kelley had been employed as the Iraq deputy in-country manager in Baghdad for Security Operations Consulting, a private company from Minden that holds U.S. Defense Department contracts.
O'Kelley's job was to ensure that all bases of operation in Iraq under contract with SOC were supplied with ammunition and other logistical support and supplies.
The indictment alleges that from January 2007 until July 2008, O'Kelley conspired with others to illegally obtain ammunition belonging to the U.S. government, then resell the ammunition to private individuals and businesses in Iraq.
At times, O'Kelley sold the ammunition back to U.S. and coalition forces, effectively requiring the government to pay for the ammunition twice, the indictment alleges.
The indictment also alleges that O'Kelley and others used Federal Express and body couriers to ship the currency derived from these transactions from Iraq to the U.S. to distribute among the conspirators. O'Kelley is accused of continuing to receive proceeds from the scheme via Fed Ex after being promoted in August 2007 to Iraq operations senior program manager at SOC headquarters in Minden.
The indictment alleges that O'Kelley took the proceeds and subsequently made four structured cash deposits, totaling $34,600, into an El Paso bank account to avoid financial transaction reporting requirements.
In emails that the government says O'Kelley and a conspirator exchanged on Jan. 17, 2008, O'Kelley allegedly states: "I need that cash sent out bro."
According to the grand jury indictment, the conspirator responds that the money has been sent and adds: "There you go my brother sorry it took so long to get out for a day. I was actually worried it would look to big. You'll like the way it is packaged hehehehehehe Ok bro, quit biting your nails candy is on the way!!" (sic)
Other alleged conspirators mentioned in the indictment have neither been identified nor indicted.
In the court, filing Assistant U.S. Attorney John E. Murphy is also seeking forfeiture of any proceeds from the scheme.
O'Kelley was arrested by federal marshals June 9 at his Indian Hills home. He made an appearance before a judge and was released from custody on his own recognizance later that day.
If convicted, he faces up to 20 years in prison on the money-laundering charge and five years for conspiracy to defraud the U.S. government.