In one of the most egregious cases of financial fraud tied to US defense contracting, Douglas Edelman – a once little-known businessman who grew into a Pentagon fuel supply magnate – has pleaded guilty to what authorities are calling one of the largest criminal tax evasion schemes in American history. The case, spanning nearly two decades and involving more than US$350 million in concealed offshore income, is being described as a wake-up call for the US government’s oversight of wartime procurement and financial accountability.

Edelman’s downfall not only highlights vulnerabilities in the Pentagon’s contractor vetting system but also offers a stark lesson about the global reach of illicit finance when left unchecked. Authorities say the scope of the fraud was staggering – an intricate web of lies stretching from Washington to Central Asia and beyond.

From bartender to billionaire fuel tycoon

Douglas Edelman began his improbable rise to wealth in the 1990s, operating a bar in Bishkek, Kyrgyzstan. It was there he developed valuable connections with regional fuel suppliers. Following the US military’s expansion into Afghanistan after 9/11, Bishkek’s Manas International Airport became a critical logistical hub. Edelman’s companies – Mina Corp. and Red Star Enterprises – secured lucrative contracts to supply jet fuel to US forces.

Between 2003 and 2014, his firms raked in over US$7 billion in US Department of Defense contracts. But behind the scenes, Edelman was building something far more nefarious than a global supply empire: a scheme to defraud American taxpayers.

Web of deception

Rather than report his massive income, Edelman orchestrated an elaborate tax evasion plot. Central to the scheme was his false representation that his 50 percent ownership in Mina Corp. and Red Star Enterprises was held not by him, but by his wife, a French citizen residing overseas. This allowed him to hide more than US$350........

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