South Dakota man gets 10 years for defrauding military, money laundering

A judge sentenced a South Dakota man on Thursday to 10 years in prison for defrauding the military and laundering the money he earned through his fraud scheme.

The U.S. attorney for the Western District of Wisconsin said in a press release that Craig Klund, 58, pleaded guilty to wire fraud, money laundering and aggravated identity theft. Klund is formerly of Chippewa Falls in Wisconsin.

In addition to his sentence, Klund — who has three prior felony convictions, two of which were also for defense contracting fraud — will pay more than $435,000 in fines.

“At today’s sentencing, after listening to Klund’s allocution, Judge [James] Peterson told Klund he thought Klund was a liar, who lied to the Department of the Defense over a long period of time, and to the judge as well,” the Thursday release said.

“Judge Peterson explained that this case involved an extensive fraud scheme that caused significant harm to the government because it was duped into contracting with a two-time convicted defense contracting felon and was receiving parts from someone with whom it did not want to deal,” it continued.

From 2011 to 2019, Klund operated as a military contractor who supplied electrical parts to various branches of the U.S. military.

Klund used false identities and hid behind 15 different shell companies to bid on 5,750 contracts, winning 1,928 of them worth more than $7 million, according to the U.S. Attorney’s office.

He netted nearly $3 million for himself in the fraud scheme.