“Defendants McGrade and Collinsworth — now convicted felons — defrauded and stole from the American people, plain and simple,” said U.S. Attorney Neil H. MacBride. “We, along with our law enforcement partners, are committed to ferreting out and prosecuting those that destroy the integrity of the government contracting process.”
In 2006, McGrade and Collinsworth married each other without telling the State Department, where McGrade worked as a contract negotiator. They both started a construction company, the Sterling Royale Group, and McGrade quickly obtained a State Department contract enabling SRG to do work at embassies without disclosing her family ties to the company. Collinsworth was SRG’s VP while McGrade’s daughter from a previous marriage, Jennifer Herring, was its president and CEO.
From 2008 to 2011, McGrade used her job at the State Department to steer 17 government contracts to SRG worth a total of $52 million. Both McGrade and Collinsworth lied about their married status after they underwent State Department security clearances.
But in 2011, a Daily Caller investigation revealed their marriage and the State Department promptly ended McGrade’s employment. Collinsworth denied his personal relationship to McGrade, but TheDC found his Myspace page in which he stated he was “happily married to my beautiful wife of one year, Kathy.”
The couple subcontracted the real construction work and kept the rest of the money, using the millions they made off the lucrative arrangement to buy extravagant luxuries such as a Lexus, a Steinway piano, houses, and a 36.5 foot yacht called the “Sterling Royale.”
But now, their years of luxury living are over — the goods have been forfeited, and prison is all but a certainty.
“The scope and breadth of this fraud is reprehensible, not just because of the dollars involved, but because of the position of trust that Ms. McGrady held,” said Thomas J. Kelly, Special Agent in Charge for IRS Criminal Investigation. ”Her actions denied small businesses the opportunity to compete for these government contracts and that is unacceptable.”