WASHINGTON, DC - Michael E. Hase, 62, was arrested in Dulles, Virginia yesterday by Federal agents of the Office of Inspector General, U.S. Agency for International Development (USAID). Hase was arrested on an embezzlement charge stemming from his work as a controller for USAID, announced Ike Hendershot, Assistant Inspector General for Investigations.

Hase is accused of diverting over $19,000 in U.S. Government funds by directing a USAID recipient, a commercial bank in Armenia, to send monies owed to the Agency to his personal bank account, according to court records unsealed yesterday evening. In January 2009, at the time of the alleged offense, Hase was a personal service contractor for the USAID mission in Yerevan, Armenia, where he was responsible for the mission's financial management activities.

According to court documents, the mission provided credit guarantees to a bank in Armenia to facilitate lending to a fish and poultry enterprise through USAID's Development Credit Authority. When the enterprise defaulted on the loan and the bank subsequently recovered funds from the enterprise, the bank was responsible for remitting 50 percent of these funds to USAID pursuant to its credit guarantee agreement. Since Hase directed the bank to transmit the funds to his personal account, USAID never received the remittances.

The criminal charge against Hase carries a maximum sentence of up to 10 years in prison.

The USAID Office of Inspector General's investigation involving Hase continues.