U.S.: Couple Stole $2M From Defense Firm

A former Northrop Grumman employee and his wife were arrested Thursday for allegedly scamming the defense contractor out of $2.6 million and spending the money on jewelry, a race car and other luxury items.

Michael and Susan Crabtree were arrested at a relative's house in Irvine Thursday, a day after a federal grand jury in Los Angeles charged them with conspiracy, wire fraud and money laundering counts.

If convicted, each could face up to 125 years in prison.

Michael Crabtree began working three years ago in a Northrop Grumman plant in El Segundo where he was responsible for ordering material and supplies for the government's F-18 Hornet and the F-35 fighter programs. Before leaving early this year, he ordered some $2.6 million in goods that were never received, prosecutors said.

It was not clear if the two had retained an attorney. The couple was believed to have lived in Buckeye, Ariz., most recently, but their phone number there was unlisted.

According to the indictment, Crabtree persuaded a Santa Ana-based company called Advanced West to bill Northrop Grumman without supplying the materials.

Advanced West, in turn, agreed to forward payments from Northrop Grumman to a firm called Driscoll Enterprises in exchange for a 10 percent cut. Driscoll Enterprises, however, was a shell company set up by Susan Crabtree, prosecutors said.

The couple also falsified documents to give the appearance that Crabtree had sought competitive bidding from suppliers, even though he had planned to select Advanced West all along, the indictment alleges.

The Crabtrees allegedly used the proceeds to buy a new home, a race car, a recreational vehicle, jewelry, electronics and a luxury box at an Anaheim sports arena where the National Hockey League's Ducks play.

Northrop Grumman has since refunded the government, which ultimately bore the costs of the fraud, authorities said. The suspects each face one count of conspiracy, three counts of wire fraud and three counts of money laundering.