March 5, 2009 – An Army captain from Beaverton stole nearly $700,000 in cash from an emergency fund while stationed in Iraq and shipped it in boxes back to Oregon, federal prosecutors say.
When he returned to the states, he went on a spending spree, buying expensive cars, appliances and furniture.
Federal Magistrate Paul Papak released Capt. Michael Dung Nguyen, 28, assigned to Fort Lewis, Wash., back to his unit after a hearing Thursday in U.S. District Court. His trial is scheduled for May 5.
A grand jury indicted Nguyen on charges of theft of government property, structuring financial transactions and money laundering. He pleaded not guilty.
The maximum penalty for each charge is 10 years in prison and a $500,000 fine.
Prosecutors said Nguyen was not a flight risk, but he did surrender his civilian passport. As a condition of his release, he can’t possess weapons and must notify the court if his unit is deployed.
Dan Wardlaw, a spokesman for the Internal Revenue Service, said his office started the investigation after it became clear that Nguyen was living beyond his military pay.
“Buying a brand-new BMW and a Hummer will attract attention,” Wardlaw said.
The IRS, the Army and the FBI cooperated in the case. Agents discovered “large and frequent currency deposits and substantial expenditures above Captain Nguyen’s legitimate income level,” according to U.S. Attorney Karin Immergut.
On Thursday afternoon, soon after the court session ended, Nguyen’s SUV was parked in the driveway of his home along Southwest Telluride Terrace, but no one answered the door.
Neighbors in the two-story, brick-and-stone homes in the Sexton Mountain neighborhood said they didn’t know the family well, but noted there were always a lot of cars and people at the house.
Prosecutors allege that while stationed in Iraq between April 2007 and June 2008, Nguyen, acting as battalion civil affairs officer, stole more than $690,000 in cash from the Commander’s Emergency Response Program.
The money was designated to help military commanders provide urgent humanitarian relief as well as pay for construction projects and other programs to assist people in Iraq and Afghanistan.
The indictment alleges that when he returned to the states in June 2008, Nguyen opened bank accounts and deposited the cash in small amounts to avoid detection. Federal officials said that at any one time, Nguyen had at least $300,000 in cash locked in a safe, most in bundles of uncirculated $100 bills.
He also attempted to launder the cash by buying a 2008 BMW M3 for $70,000 and a 2009 Hummer H3T for $43,000, prosecutors contend. Agents seized both vehicles, along with computers, electronics, two handguns, furniture, appliances and cash. Additional items were seized from an apartment in Lakewood, Wash.
In all, Immergut said, agents recovered about $436,000 in cash and merchandise.
Nguyen, a 2004 graduate of the U.S. Military Academy at West Point, N.Y., was assigned to the 4th Stryker Brigade Combat Team, 2nd Infantry Division.
Assistant U.S. Attorney Scott Asphaug said Nguyen surrendered Thursday morning to U.S. marshals in Portland.
“As an officer of the U.S. Army, and a graduate of West Point, Capt. Nguyen agreed to uphold the principles of ‘Duty, Honor, Country,'” Immergut said.
“By stealing money intended to assist Iraqi citizens, Capt. Nguyen betrayed his country and the fine men and women of our nation’s armed services.”