How State Department Was Duped in $60M Fraud Scheme

May 19, 2013

A federal investigation of former State Department contracting specialist Kathleen McGrade has uncovered a treasure trove of luxuries allegedly acquired with the proceeds of a multimillion-dollar contracting scam: a Steinway piano; sculptures; sapphire, emerald and diamond jewelry; and a 41-foot yacht bearing the name of the company she and her husband formed, Sterling Royale.

As prosecutors see it, McGrade, 64, steered heating, ventilation and air conditioning work at embassies around the world to the Sterling Royale Group (SRG), all while keeping her relationship with her husband secret from co-workers.

Along with her husband, Brian Collinsworth, 46, she pleaded not guilty May 3 to conspiracy, wire fraud and other felony charges, which carry penalties of up to 20 years in prison.

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