SAN ANTONIO — Authorities have arrested a third person in Texas as part of their investigation into an Army contract-rigging and bribery case that was described by a federal official as the largest to emerge from the Iraq reconstruction effort.
Justice and Defense department officials arrested Carolyn Blake, a former schoolteacher, in Dallas on Wednesday on charges she conspired to accept $3.1 million in bribes from contractors and laundered money.
Blake is accused of working with her brother, Maj. John L. Cockerham, a contracting and procurement officer assigned to Fort Sam Houston, who was arrested Monday on charges that he took $9.6 million in kickbacks and anticipated receiving $5.4 million more for rigging military supply contracts.
His wife, Melissa Cockerham, 40, was also arrested Monday on charges she accepted bribery payments for her husband and helped conceal them.
Investigators say the payments occurred in 2004 and 2005, with the money being deposited to banks in the Middle East and then moved to offshore banks in the Caribbean, according to court records.
The alleged bribes are greater than the $4 million that had been identified as largest bribery case associated with the rebuilding of Iraq, according to the agency formed by Congress to oversee public funds used to rebuild Iraq.
"This is the largest bribery case that's come out of the Iraq reconstruction experience," said Stuart W. Bowen Jr., the Special Inspector General for Iraq Reconstruction.
Bowen's agency has referred about 30 cases — out of 65 active fraud investigations into military contracts in the Middle East — to the Justice Department for prosecution.
Blake, 44, pleaded not guilty Wednesday in a Dallas federal court and was ordered held pending a bail hearing scheduled for Monday.
A Wednesday bail hearing for the Cockerhams in San Antonio was postponed until Tuesday after confusion arose about whether the couple would be represented by public defenders or lawyers they hired.
Brent K. De La Paz, an attorney representing Melissa Cockerham, said the public shouldn't jump to conclusions about the allegations.
"There's a lot of things I would love to know where the government is getting their information from," De La Paz said. "Short of having something with a signature, I don't think there's anything there beyond an allegation. I'd hate to see a rush to judgment and then later to see that it was not exactly the way it was presented."
As he was escorted back to jail on Wednesday, John Cockerham shouted to reporters that the American Civil Liberties Union should be notified.
"We're suffering injustice in the name of justice," Cockerham said. "I guess we can thank the Department of Justice for this."
Another of his sisters, Christine Tallie, said she was "in denial" about the allegations.
"All I know is he's a man of integrity," Tallie said. "He's an honest person. ... He's a true man of God."
Cockerham was stationed in Kuwait in 2004 and 2005, according to the military.
According to court records, the contract-rigging he is accused of took place during those years in the Middle East and involved steering contracts for military support services, such as bottled water and laundry services.
Investigators say eight contractors were involved in the graft, according to court records, but the companies are not named. Federal court records in Detroit involving a related case identified two of the companies as TransOrient and Green Valley.