US indicts two in World Bank fraud case
( 2001-05-26 13:52 ) (7 )

A former World Bank official and a contractor for the lending agency were indicted for their alleged roles in a scheme to defraud the World Bank of US$520,000, federal prosecutors said on Friday.

Fritz Rodriguez, a former principal sanitary engineer with the World Bank, and David Pearson, former owner of Managed Information Systems, were indicted by a federal grand jury on charges of conspiracy, money laundering and fraud, US Attorney Kenneth Wainstein said in a statement.

Pearson was arraigned on Friday in US District Court, and an arrest warrant has been issued for Rodriguez.

According to the 17-count indictment, Rodriguez collaborated with Pearson, a former friend and neighbor, to secure a contract for an Algerian project administered by the bank.

The indictment said Rodriguez was responsible for soliciting bids from companies to deliver a pilot system for computerizing water utility billing in Algeria.

According to the indictment, the Bank awarded a contract to Pearson in April 1995, based on the recommendation of Rodriguez, who had purposely misrepresented his friend's qualifications to handle the project.

The World Bank stopped payments to Pearson in August 1996 after officials determined that he had made no legitimate efforts to fulfill the terms of the contract, the indictment said.

If convicted on all counts, Rodriguez and Pearson could face prison terms of more than 20 years, prosecutors said.