FEDS: Man Ran Theft Scheme From FTC Headquarters, Stealing More Than $218,000 From Consumer Watchdog Agency; Harold Hughes Faces Up To 10 Years In Prison After Guilty Plea

Two weeks after an employee of the U.S. Food and Drug Administration was accused of stealing confidential information from a government database to profit from illicit stock trades, another government employee accused in a separate case of taking advantage of his position to commit a crime has pleaded guilty.

Harold Hughes, 58, of Arlington, Va., was a supply clerk for the Federal Trade Commission. In April 2009, just two months after he began his stint as an FTC clerk, Hughes “began using FTC money to make unauthorized purchases,” federal prosecutors said.

By the time the scheme was discovered, Hughes had used FTC money to acquire computers, TVs and DVD players illicitly, eventually draining $218,636 from the agency’s coffers, prosecutors said.

Part of his gambit, prosecutors said, was to order the items and then sell them for cash at a discount.

Some of the items were delivered to FTC headquarters, and Hughes “used his proximity to the mailroom and his familiarity with its employees to avoid detection,” prosecutors said.

In some cases, he removed the illicitly purchased items from the FTC building and shipped “other items via Federal Express using FTC funds,” prosecutors said.

“As the scheme continued, Hughes arranged for items to be shipped directly to his residence in Virginia and to the residences of people to whom he had arranged to sell the items,” prosecutors said.

Prosecutors did not say who his customers were.

The FTC discovered the thefts in December 2010, about 22 months after Hughes became an agency shipping clerk, prosecutors said. Hughes was “removed” from his job, and an investigation was launched.

“Before the FTC discovered the theft and removed Hughes from his position as supply
clerk in December 2010, Hughes made unauthorized purchases from vendors totaling $217,372.11, and he accrued $1,264.10 in unauthorized shipping charges, causing a total loss to the FTC of $218,636.21,” prosecutors said.

Hughes faces a maximum prison term of 10 years. He has agreed to make restitution and to an order of forfeiture, prosecutors said. He is scheduled to be sentenced July 13.

On March 29, federal agents arrested Cheng Yi Liang, 56, of Gaithersburg, Md. Liang worked at the FDA as a chemist, and prosecutors said he mined information from the agency to make illicit stock trades and rack up $3.6 million in illegal profits and avoided losses.

Liang, 56, also was sued by the SEC.

Officials have cautioned the public against painting with too wide a brush when a government employee gets in trouble.

Multiple agencies became part of the probes into both the conduct of Liang and Hughes, according to records.