Updated: 1:21 p.m.: A Department of Veterans Affairs supervisor, his wife and a Killeen business owner were charged by federal authorities Wednesday for their roles in a scheme to defraud the Temple VA Medical Center of about $250,000, U.S. Attorney John F. Bash announced Wednesday.

The charges stem from an internal investigation into corruption at the engineering department of the Temple campus, first revealed by the American-Statesman last year.

STATESMAN INVESTIGATES: Investigation finds corruption, intimidation at Temple VA campus

Christopher Sebek, the operations supervisor in the department, and Jeffrey Pearson, the owner of Whitetail Industrial, were each charged with one count of conspiracy to defraud the government and one count of theft of government property. Melissa Sebek, who owns MS Bookkeeping Services, was charged with one count of theft of government property.

Investigators allege that for five years beginning in February 2012, Christopher Sebek and Pearsall submitted fraudulent invoices to the VA for goods and services supposedly for VA use. Instead, the money they received was used to pay for Sebek’s personal purchases and to cover Pearson’s 30 percent commission on each invoice, investigators said. Sebek also presented bogus invoices from his wife’s bookkeeping company, according to court records. Christopher Sebek is also accused of stealing two VA credit cards and using them to pay for personal expenses.

The VA’s Office of Inspector General investigated the case.

According to court records, all three already have entered into plea agreements with prosecutors. According to the U.S. Attorneys office, the charges mark the end of the investigation.

On Thursday, U.S. Magistrate Judge Jeffrey C. Manske issued summonses for the three for an initial hearing on October 16 in Waco.

In a press release Wednesday, officials said the defendants face up to ten years in federal prison on the theft charges. The conspiracy charges against Christopher Sebek and Pearson could lead to five years in prison.

Last year, a three-person VA administrative board uncovered the allegations against the three as part of an investigation into corruption within the Temple campus’ engineering department, as well as claims that veterans undergoing drug and alcohol treatment were being used to perform work for VA officials.

A preliminary, unsigned version of the board’s report, obtained by the Statesman, found that some VA supervisors had stolen equipment from the agency and benefited personally from the labor of veterans in a vocational training program. Current and former veterans in the program testified that they had been told to build fences, repair sprinkler systems and perform other landscaping work at the homes of certain supervisors and their family members.

One veteran told investigators that during a work assignment, he was told to take new shelving furniture to Sebek’s home. Once they had loaded the shelving into the garage, the veteran said a VA employee informed him it was Sebek’s place.

The veteran said the employee told him: "We were never here."

Two workers said they were sent to the home of John D. Summers, the engineering division chief, to cut trees and install fencing. One of the veterans told investigators he was warned not to interact with Summers at the property. The veteran said he was paid $60 for the work there.

The veterans were part of the VA’s Compensated Work Therapy program, which is meant to help struggling veterans, many of whom have been out of the job market for years, gain the work experience and confidence they need to find a job in the outside world.

The board also concluded that over $1.3 million was funnelled through Pearson’s Whitetail company over the past few years, sparking the criminal investigation against the Sebeks and Pearson.

Christopher Sandles, director of the VA in Central Texas, told the Statesman last year that the Temple campus would implement greater inventory control of lawn equipment and keep better track of government credit cards.

"We are making quite a few changes systemwide to make sure something like this doesn’t happen again," he said at the time.