NC woman used 16 fake names to scam government out of $2.2 million, prosecutors say

A lone woman in North Carolina used dozens of fake names and businesses to rake in millions of dollars in government contracts for more than a decade, according to federal prosecutors.

Stephanie Dianna Elliott, 45, is accused of securing government contracts for everything from prison food to military supplies without ever delivering the goods or paying third-party vendors who fulfilled the orders. Instead, federal prosecutors said Elliott kept the money for expensive vacations and shopping.

She was indicted last month on 26 counts of wire fraud and five counts of money laundering, the U.S. Attorney’s Office for the Eastern District of North Carolina said Tuesday in a news release.

Elliott, who is from Fayetteville, faces up to 20 years in prison on each count if she’s convicted.

Defense attorneys representing her did not immediately respond to McClatchy News’ request for comment after business hours on Tuesday.

State and federal governments award billions of dollars every year to qualified contractors — the most expensive of which are doled out by the U.S. Department of Defense for military operations. Aerospace and defense companies such as Lockheed Martin, Boeing and Northrop Grumman routinely receive contacts valued at upwards of $100 million.

Elliott’s alleged scheme started as early as 2006 with a contract to provide 4.5 million sandbags to Louisiana after Hurricane Katrina had devastated the state the year before.

Prosecutors said she won the contract by putting in a low bid, then secured a deal with a sandbag manufacturing business to deliver the sandbags to the National Guard at a higher price. She reportedly stood to lose more than $500,000 on the deal. But when it came time to pay the company, prosecutors said Elliott gave about a third of what was owed.

Elliott used what was left of the $900,000 she received from the government to pay victim restitution in a court case, buy a Mercedes, wire her then-husband money and make at least six trips in eight weeks to Las Vegas and Atlantic City, according to an indictment filed last month.

Prosecutors said she orchestrated a similar scam in 2008 under a contract to deliver food to Louisiana prisons using a food distribution company based in Mississippi.

It wasn’t until 2010 that Elliott reportedly set her sight on defense department contracts.

She used at least 17 businesses and 16 aliases as well as her real name to secure the deals and relied on the government to send payment before the goods were shipped or received, according to the indictment. Over the next 10 years, prosecutors said Elliott locked in more than 1,000 federal defense contracts worth at least $2.2 million.

Each time the government debarred Elliott and her business from receiving future contracts, prosecutors said she filed a new bid under a different name with another company.

She’s accused of spending the cash on lottery tickets, restaurants and trips — including $15,000 on flights, a hotel and cash withdrawals at Caesars Palace in Las Vegas, according to the indictment.

Elliott also used the contract money to shop at Victoria’s Secret, fly to Jamaica and Aruba and fund trips to Gatlinburg, Tennessee, prosecutors said.

A grand jury indicted Elliott on March 18 and she was arrested April 6, court filings show. A federal judge ordered her to remain in jail pending trial, citing in-part community safety and the weight of evidence against her.

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