Former Picatinny Arsenal Manager and Son Arrested for Embezzling

NEWARK - A former manager at Picatinny Arsenal and her 19-year-old son were arrested and charged today with conspiracy to embezzle approximately $50,231 using a government-issued credit card for purchases of gift cards, computers and more, U.S. Attorney Christopher J. Christie announced.

Mary Ann Peterson, 46, and her son, John T. Peterson, of Lake Hopatcong, were arrested at their home this morning. They both appeared later in the day before U.S. Magistrate Judge Madeline Cox Arleo and were released on $50,000 personal recognizance bonds.

The criminal Complaint naming the mother and son alleges that they purchased personal items, including computer equipment, digital cameras, police-related equipment, cellular telephones and thousands of dollars worth of gift cards with Mary Ann Peterson's government-issued credit card.

Both are charged with conspiracy to embezzle, which carries a maximum penalty of five years in prison and a $250,000 fine.

The investigation began on Dec. 15, 2005, after law enforcement officers in Jefferson Township arrested John Peterson in connection with outstanding warrants following a traffic stop. According to the criminal Complaint, as the officers were making the arrest, they observed full-length police emergency light bars secured to the front windshield and rear window of the vehicle he was driving. The officers also observed a light and siren control box and a police duty belt containing handcuffs and pepper spray inside the vehicle, a 2005 Ford Mustang. The investigation revealed that the police equipment was purchased with Mary Ann Peterson's government-issued credit card and shipped to John Peterson at their home in Lake Hopatcong.

While employed at Picatinny, Mary Ann Peterson was authorized to use her government-issued credit card to purchase office-related supplies for use in the building in which she worked, according to the Complaint. In connection with such authorized purchases, Mary Ann Peterson prepared purchase orders which required pre-purchase approval by her supervisor. In an effort to conceal the unauthorized purchases made by her and her son, Mary Ann Peterson either did not create purchase orders or submitted false purchase orders to her supervisors after the purchases had been made.

Peterson was employed at Picatinny since 1978. The criminal activity described in the Complaint occurred between approximately April 2005 and January 2006, while she was employed as a building manager for Quality Engineering and Systems/Assurance.

During the arrest of John Peterson, police discovered and seized from inside his car approximately $6,250 worth of gift cards, receipts for various items purchased in the amount of $3,400, two laptop computers and a GPS navigational system, according to the criminal Complaint. In addition, law enforcement officers observed a U.S. Department of Defense vehicle decal affixed to the front windshield. The investigation reveals that the decal was registered to Mary Ann Peterson, in her official capacity as a U.S. government employee at Picatinny Arsenal, for another vehicle.

The investigation also revealed that Mary Ann Peterson had used the government-issued credit card to rent the Ford Mustang her son was driving when he was arrested. According to the criminal Complaint, Mary Ann Peterson had rented the car for four months.
A criminal Complaint is merely an accusation. All defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt.

Christie credited Special Agents of the Defense Criminal Investigative Service, under the direction of Resident Agent in Charge, James Murawski; Special Agents of the Federal Bureau of Investigation, under the direction of Special Agent in Charge Leslie G. Wiser, Jr.; and Installation Management Agency, Office of Criminal Investigations at Picatinny Arsenal under the direction of the Director of Emergency Services, Oscar T. Perry, with their investigation of the Petersons.

The case is being prosecuted by Assistant U.S. Attorney Lisa Rose of the U.S. Attorney's Office Government Fraud Unit in Newark.