THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Saturday, February 18, 1995            TAG: 9502180393
SECTION: LOCAL                    PAGE: B1   EDITION: FINAL 
SOURCE: BY MARC DAVIS and JOE JACKSON, STAFF WRITERS 
DATELINE: NORFOLK                            LENGTH: Short :   45 lines

EX-CAPTAIN DID NOT BILK NAVY, COURT SAYS 2 CO-DEFENDANTS, COMPANY ALSO ACQUITTED

The leader of a community of American citizens in Mexico, a man jailed last year on charges of bilking the U.S. Navy, has been cleared of all charges.

A jury also has acquitted his two co-defendants and the company for which he worked.

On Tuesday, U.S. District Judge Rebecca B. Smith dismissed all 15 counts of mail fraud and making false statements against Dennis Strole, a 58-year-old retired U.S. Navy captain living in Guadalajara.

Smith dismissed the charges after a weeklong jury trial. Strole's arrest last summer in Guadalajara sparked a major flap among American citizens there, where Strole is president of a large American social/service society. Strole spent 40 days in a Mexican jail during the extradition dispute.

Strole was vice president of the Virginia Beach office of Person-System Integration, an Arlington-based firm that had a $14 million contract to provide training and instructional programs and services to the Naval Air Systems Command.

The company, Strole and two other company officials - Gary J. Humphries and Daniel L. Milliman - were accused of overbilling the Navy from 1988 to 1992.

Federal investigators spent 2 1/2 years auditing $40 million in defense contracts carried out by PSI, evidence showed. In the end, agents targeted suspected overbilling in contracts worth $50,000.

The case began when federal agents were approached by two PSI employees who made allegations of overbilling. The two informants, who eventually left the company, were portrayed by defense attorneys as disgruntled employees.

On Tuesday, the judge dismissed all charges against Strole, and dismissed 10 of the 15 charges against Humphries, Milliman and the company. On Thursday, a jury acquitted Humphries, Milliman and the company on the remaining charges.

``This just goes to show what can happen when disgruntled employees make these accusations,'' said retired FBI agent Steve Scheiner, who acted as lead investigator for the defense team. ``It's amazing that things got this far.'' by CNB