Woman Pleads Guilty to Department of Energy Contract Scheme

The wife of a former Department of Energy employee pleaded guilty today to participating in a scheme that awarded her company more than $1 million in federal contracts.

The U.S. Attorney’s Office said Karen (Earle) Strayer, 48, of Lovettsville, VA, pleaded guilty to working with her husband, Michael Strayer, a former Department of Energy Senior Executive Service member, in rigging the contract.

Michael Strayer has since died.

Karen Strayer faces a maximum sentence of one year in prison followed by one year of supervised release and a $100,000 fine.  As part of her plea agreement, she has agreed to pay $104,000 in restitution, according to government lawyers.

District Judge Alexander Williams Jr. scheduled sentencing for Dec. 6. The couple was indicted in May.

The criminal case was the culmination of a two-year investigation by the Justice Department and the Department of Energy’s Office of Inspector General. The Department of Energy has a site in Germantown.

Here is the chain of events, as outlined in the plea agreement:

2006

Prosecutors allege that in 2006, Michael Strayer helped the Karen Earle— whom he married in 2009 — get a job as a consultant with a scientific publishing company to obtain articles for a magazine called the SciDAC Review.  The Department of Energy provided funding to the publishing company to produce the magazine.

Strayer and Earle reportedly started dating soon after.

2007 to 2008

Strayer directed the publisher to contract with Earle, providing payments of nearly $100,000 per issue to his future wife. Strayer would orchestrate contracts for eight issues between 2008 and 2009, the plea agreement said.

In March 2008, Earle and Strayer allegedly purchased a home together in Lovettsville, VA, using contract money to cover some of the $120,000 down payment.

2009

In June 2009, Strayer formally recused himself from participation in any Department of Energy matter involving Earle, according to the U.S. Attorney’s Office.

But after the couple married in August 2009, the plea agreement states, Strayer devised three contracts that would have paid his wife more than $980,000 to perform work on 2010 issues of the magazine. 

October 2009

In October 2009, the publisher stopped payment on the subcontracts due to complaints of impropriety. Karen Strayer sued on four contracts and received a settlement from the publisher, the plea agreement states.

The net gain to Karen Strayer on the contracts executed after the her husband's recusal was $104,000, the government said.