In the wake of the 9/11 attacks, the United States Navy awarded contracts valued at some $66 million to enhance security at its bases on the West Coast and in Hawaii. But Pentagon officials would soon come to regret their choice of company to receive the lucrative deal.
The contracts went to a company, Surgical Shooting Inc., run by former Marine Sgt. Gary Lakis, who cited his special operations combat experience from Panama to Somalia and wore a chest-full of medals.
"I think it was two Silver Stars, three Purple Hearts, three Bronze Stars, two Air Medals," said Rick Sweeney, who was Lakis' former chief of operations and previously had served in the Special Forces. "He had pretty much everything you could imagine on his chest except for the Medal of Honor."
Under the contracts, Lakis' company was to teach Marines and sailors how to track and take on terror threats.
He and his company were featured several times on San Diego's local television news broadcasts in stories about special military operations.
"You can teach a lot of people basic marksmanship skills and teach 'em how to shoot, but then to teach them to be able to do precision, surgical shooting is difficult," Lakis said in one news report.
Special Forces' Suspicions
But for all his talk, some of his own employees soon became suspicious that Lakis was a phony.
"He was my boss," said Sweeney. "We had all pretty much heard about his qualifications and I was fairly embarrassed by his performance."
ABC News has learned there is no record of combat during Lakis' 10 years of active and reserve duty: no special operations, no Silver Stars, no Bronze Stars, and no Purple Hearts.
A group of Marine veterans questioned the huge number of decorations Lakis wore to a Marine veterans reunion where he even posed for pictures with the then-Marine commandant, Gen. James Jones.
"All he was, was nothing but a dirty liar and a phony. That's all he turned out to be," said Dick Sasser, a former Marine veteran who was a member of the Marines' elite special operations unit called Force Reconaissance.
Pentagon Procedures Under Fire
When Lakis' own employees went out to set up the training facilities, it became clear to them that Lakis didn't know what he was doing. When they found out his experience certificates and medals were all fabricated, they approached the Navy.
The Navy has since cancelled Lakis' contract, but a member of the House Select Committee on Homeland Security said the case raises questions about the Pentagon's procedures.
"You wouldn't hire an employee, a single employee, without checking their resume," said Rep. Peter DeFazio (D-Ore.). "You're going to give a guy a $66 million contract and not look beyond the piece of paper he gave you that states something that may or may not be true?"
The Navy declined to comment on its failure to check Lakis' background or his many supposed medals. The FBI and the Defense Department — specifically the Defense Criminal Investigative Service — have opened a criminal investigation into Lakis and how the contract was awarded.
"A lot of folks that I know have died for those medals and people are buried all over this world," said Sasser. "Whatever happens to Lakis, he deserves everything he gets."
Lakis, who has not been criminally charged, disappeared in 2003, leaving a forwarding address in Australia. Multiple efforts to reach him for contact were unsuccessful.