David Drake

An employee of the D.C. Office of the Chief Technology Officer and a private contractor were charged with corruption Thursday after an FBI raid at the former office of one of President Obama's appointees, Vivek Kundra.

Kundra is on leave from his White House job until further details of the case become known, a White House source tells the Associated Press.

Kundra has not been linked to Thursday's raid.

Yusuf Acar, 40, acting chief security officer of the D.C. Office of the CTO, was charged with bribery of a public official, money laundering, wire fraud and conflict of interest.

Acar was ordered held without bond until a hearing Tuesday.

FBI agents found $70,000 in Acar's Northwest D.C. home when they arrested him Thursday morning.

Acar, a native of Turkey, is responsible for buying D.C.'s computer equipment and hiring contract workers for various D.C. agencies. Acar, who has been with the agency since December 2004, has an annual salary of $127,468, according to charging documents.

Sushil Bansal, President and CEO of Advanced Integrated Technologies Corporation (AITC) and a former D.C. government employee, was charged with bribery of a public official, money laundering, wire fraud and conflict of interest.

Bansal, 41, was released but ordered not to engage in overseas financial transactions and had to surrender his passport. Bansal, of Dunn Loring, Va., is due back in court on April 21.

Government records show Bansal, a native of India, is not a U.S. citizen and holds an H-1B visa, which is given to foreign workers in specialty occupations.

Authorities say Acar and Bansal, along with others, used a variety of schemes to defraud the D.C. government, including billing the District for inventory that was never delivered and billing "ghost" contract employees who never worked.

The alleged scheme involved Acar approving falsified bills and then splitting the money with Bansal - who submitted them - and other vendors, according to charging documents.

The FBI worked with another D.C. Office of the CTO employee who was in on the scheme and secretly recorded conversations with Acar and Bansal as part of the investigation.

Several other individuals and businesses are involved in the alleged schemes, but an FBI affidavit supporting the arrest warrants only identifies them by their initials.

Bansal's company has offices in D.C. and India and received more than $13 million in business with the D.C. government in the past five years, according to court documents.

One contract involved providing computer support to the D.C. Department of Motor Vehicles. The company also was given a contract to upgrade the city's human resources computer records and sold virus detection software to the city.

In 2008, Bansal received the Entrepreneur of the Year Award from the Association of Indians in America, according to AITC's Web site.

Last week, Kundra resigned from his post as D.C. chief technology officer to take a job in the Obama administration as the federal government's chief information officer.

White House press secretary Robert Gibbs said the Department of Justice told the White House on Thursday morning of its planned raid.

However, Gibbs declined to comment on whether the White House was aware of the investigation before Thursday.

AITC has been working with the D.C. government since 2004. Once Kundra took over as D.C. Chief Technology Officer in March 2007, AITC's contracts doubled to more than $5 million in 2008.

Kundra has also worked for Science Applications International Corporation (SAIC). During his time at SAIC, Kundra provided consulting services at the U.S. Department of Health and Human Services (HHS).

On AITC's Web site, Bansal lists SAIC as one of AITC's strategic partners and says his firm has performed contract work for HHS.

On Thursday morning, the FBI served a search warrant at the office of D.C.'s Chief Technology Officer.

More than a dozen FBI agents - including evidence technicians - were at the office, located at 1 Judiciary Square on 4th Street in Northwest.

Most of the employees were told to go home. Other employees were put into a waiting room.

The FBI later expanded its search from 9th floor offices to 10th floor offices.

The 10th floor was closed to the public while the FBI searched the offices that house the Administrative Services Modernization Program.

As the raid took place, Kundra was giving a speech at FOSE - an annual government technology expo - about changing the way the government purchases materials from vendors.

Kundra, 34 years old, formerly headed the D.C. government technology office but took a leave to serve on the President Barack Obama’s transition team. He was recently named the administration’s chief information officer, tasked with improving government transparency and overseeing Recovery.gov, the administration’s Web site on stimulus spending.

FBI officials declined to offer any details about the raid or arrests. “It’s an ongoing investigation,” said Debra Weiserman, an FBI spokeswoman.

Nevertheless, the raid and arrests raise questions about Kundra’s management while at the D.C. government, since his high-tech operation was touted as a model for other cities for providing real-time budget and contracting information to city officials.

Kundra created a trading-desk style operation in the D.C. government building, with large flat-screen monitors surrounding employees who could track city spending via electronic systems he helped put into place. Using Google and Wiki-like Web pages, Kundra tried to open up the D.C. government. The office put more information on the Internet, including police records and city contracts.

The systems were, in short, designed to prevent the sort of suspected contractor fraud that the FBI appears to be investigating.

The operation Kundra built for the D.C. government was a major reason why he was tapped to join the Obama transition team, where his assignment was helping develop Recovery.gov, which is designed to be a hub of information to allow the public and government officials track stimulus spending.

UPDATE: A White House official said this evening that “Kundra is on leave from his position until further details become known.”