The battlefield cash was important in pacifying the region, Frias said, not only in helping farmers to repair their irrigation systems but also in hiring local Sons of Iraq fighters to set up permanent security stations in areas that had been subject to frequent insurgent bombings.
When the unit arrived in September 2007, "people weren't on the streets. . . . There was no real [Iraqi security] presence at all," Frias said. "When we walked out of that place [in May 2008], it was a different place. People were out, stores were open, Sunni and Shia were working together."
Nguyen's officer evaluation report said he personally had developed $11 million worth of plans and programs to support the counterinsurgency fight.
The young captain "forged strong relationships with local and tribal leaders to improve governance," a court affidavit said. "His knowledge of the systems used by the Provincial Reconstruction Team and the Muqdadiya city government helped local leaders to leverage coalition assets and money to start rebuilding the city."
Maj. Eric Hefner, Nguyen's supervisor, told investigators that Nguyen was the only person who had the combination to a safe where as much as $400,000 in U.S. currency at a time was stored, most of it intended to pay Sons of Iraq fighters. It was only in April 2008 that payments shifted from U.S. currency to Iraqi dinars, a tactic that military officials said reduced the chance of theft.
Hefner told investigators that Nguyen might have stolen the money by asking Iraqi fighters to sign receipts for more than they had received, or by having them sign duplicate receipts under the pretense that the originals had been lost.
Starting June 9, 2008 -- the day he returned to the United States -- Nguyen opened four bank accounts in three days, according to court documents, making 47 cash deposits totaling $387,550. Each deposit was under the $10,000 limit that would trigger a mandatory report from the bank.
Surveillance photos showed Nguyen making cash deposits at four Washington Mutual bank branches in Oregon, Washington and Utah.
Nguyen has pleaded not guilty. Neither he nor his attorney responded to requests for comment.
Warren, of the special inspector general's office, said cash thefts such as those Nguyen is accused of often involve kickbacks to Iraqi authorities. "He says, 'Look, if you come in and tell me you're going to have 400 men I need to pay, and you're really paying 200 . . . we split this,' " Warren said. "Those are the kind of schemes that can happen."
