McClatchy Newspapers

TACOMA, Wash.- As a technician with the Federal Aviation Administration, Steven B. Smith was paid to work on equipment used to keep the flying public safe.

Federal prosecutors contend the Southern California resident also used his position to steal nearly $3 million in public property, including a 50-foot yacht, a Cessna airplane and a 44-foot yawl once used by Navy ROTC students at the University of Washington.

A federal grand jury in Tacoma indicted Smith and his half-brother, Bradley A.G. Garner, earlier this month on one count of wire fraud and theft of honest services.

Smith and Garner, who splits time between California and his native Canada, are to be arraigned Feb. 27 at the U.S. District Courthouse in Tacoma, Wash. Efforts to reach their attorneys were unsuccessful.

The case is being prosecuted in Tacoma because some of the stolen merchandise came from federal agencies with offices in Western Washington, or was processed through Fort Lewis, Wash.

In essence, prosecutors say, Smith used the government’s excess-property stockpile as his personal shopping mall, only he rarely paid for his merchandise. Garner helped Smith sell or move some of the illegally obtained property, according to court records.

Prosecutors contend the brothers defrauded the government of more than 200 items over a four-year period.

“It was part of the conspiracy that Smith, Garner and others would obtain millions in proceeds during their conspiracy, including motor yachts, sailboats, fishing boats, ski boats, trucks, trailers, heavy equipment, tools and other valuable items,” federal officials wrote in charging documents.

The brothers kept some of the items for their own use and sold others including as many as 20 Apple computers on eBay, prosecutors contend.

In the aftermath of Smith’s alleged fraud, the FAA and the U.S. General Service Administration, which oversees the government’s excess property, worked together to “identify weaknesses” in the government’s property-disposal system, FAA spokesman Ian Gregor said.

“We have both taken steps to prevent this from happening again,” Gregor said via e-mail last week. “Beyond that, I can’t go into details on a security matter.”

Smith no longer works for the FAA, Gregor said. Citing agency policy, he declined to say whether Smith quit or was fired.

The scheme began in late 2004, according to court records, when Smith improperly gained an access code to a GSA Web site where excess property from across the federal government is listed.

Government officials use the site to find equipment discarded by another agency that they might need for their departments. Federal law requires agencies to fill property needs first from excess government property before spending taxpayer money to buy it from an outside source.

Smith, prosecutors contend in court documents, used the system to procure property “purportedly on behalf of the FAA and other federal agencies and departments, but in truth and fact for himself and his co-conspirators.”

Smith lied to numerous government officials to secure the property, court records state.

His scheme went unnoticed until February 2008 when he used the GSA Web site to acquire the Navy sailing yacht Lively, which had been declared excess property after being used by the Navy ROTC program at the UW.

According to court records, a government property-disposal specialist based in Auburn became suspicious of Smith and reported him to GSA investigators.

The agency launched an investigation that culminated in November 2008 when more than 40 federal agents and local law enforcement officers raided several locations in Southern California, seizing more than $1 million in stolen property and arresting Smith and Garner.