KCBY News Story Published: Sep 27, 2010 at 7:26 PM PDT

http://www.kcby.com/news/local/103902109.html

COOS BAY, ORE - Federal search warrants that were served in Coos Bay and North Bend on September 23rd have been unsealed, shedding some light on what brought a number of Federal agents to the Bay Area.

Search warrants were executed at one business in Coos Bay and five homes in North Bend and Myrtle Point. All were for members of one family.

According to the application for the search warrant at Kustom Products in Coos Bay, Federal investigators believe, that since September of 2005, the company has "routinely and systematically engaged in a scheme to defraud the United States by providing nonconforming substitute parts and supplies to the DoD(Department of Defense) on contracts and purchase orders awarded to KPI(Kustom Products, Inc) and SOS(Southern Oregon Sterling Parts and Service) by DoD procuring activities."

The warrant application goes on to say that, in that time, the company had been awarded about 31-million dollars in Department of Defense contracts and purchase orders.

This is just some of the information that has been unsealed in a 98-page Affidavit signed by James McMaken, a Special Agent with the Department of Defense, Inspector General, Defense Criminal Investigative Service.

In it, McMaken also says that facts indicate that proceeds were attained from wire fraud and money laundering, as well as from engaging in monetary transactions in criminally derived property and from aircraft part procurement fraud.

The investigation is ongoing.

KCBY is continuing to follow this story and will have more details as they become available.