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Two Businessmen Indicted in Kansas for Alleged Fraud Scheme Involving Nuclear Weapons Manufacturing Subcontracts

Two businessmen have been indicted in Kansas City, Kansas, for their alleged involvement in a scheme to fraudulently manipulate subcontract awards within a major engineering firm working on nuclear weapons manufacturing projects for the National Nuclear Security Administration's Kansas City National Security Campus (KCNSC).

The indictment, which was unsealed today, identifies the accused individuals as Michael Clinesmith, 67, from Kansas, and Richard Mueller, 63, from Missouri. According to court documents, the alleged scheme spanned from 2011 to approximately January 2021.

Clinesmith, who had a long tenure with the major engineering firm referred to as "Company 1," was responsible for designing and procuring specialized gauges for measuring nuclear weapon components. During this period, it is alleged that he solicited and received kickbacks and bribes from Mueller, who operated "Subcontractor 1." In exchange for these illicit payments, Clinesmith is said to have steered gage subcontracts from Company 1 to Mueller's company.

Clinesmith is accused of directing Mueller on how much to bid for these subcontracts, which Company 1 subsequently awarded. He would then report to his employer, Company 1, that the bids were fair and reasonable, all while withholding the fact that Mueller would secretly funnel money awarded to Subcontractor 1 back to him. The indictment also alleges that Mueller provided false information to federal agents regarding the number of impacted subcontracts and his involvement in the fraudulent scheme.

Both Clinesmith and Mueller are facing charges of one count of conspiracy to commit wire fraud and honest services wire fraud, along with four counts of wire fraud and honest services wire fraud. Additionally, Mueller has been charged with one count of making false statements to federal agents. If convicted, they could each be sentenced to a maximum of 20 years in prison for the conspiracy, wire fraud, and honest services wire fraud charges, with Mueller facing an additional maximum penalty of five years in prison for the false statements charge.

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