In 1989, Robert P. Schmitt was put in charge of a federal project to combat counterfeiting by weaving special threads into a new kind of $100 bill. Yesterday, he admitted in U.S. District Court to stealing $1.6 million worth of them.
Schmitt, 31, of the 4200 block of Kings Road, Edgewater, pleaded guilty before Judge Marvin J. Garbis to theft of government property and money laundering in the largest theft in the Bureau of Engraving and Printing's 132-year history.
The engineer, who was described as a community leader and rising star at the bureau, showed no emotion as he heard the maximum penalty -- 20 years in prison and $610,000 in fines.
Most of the money has been recovered.
Schmitt's lawyer, William McDaniels, said that he would argue at the sentencing Jan. 6 that Schmitt was on Prozac, an anti-depressant, and functioning at a "diminished capacity" when he committed the thefts last spring.
Schmitt told Judge Garbis yesterday that he no longer is taking Prozac but is seeing a psychiatrist and was taking the tranquilizer Xanax.
"It just relaxes me, to the best of my knowledge," he said.
Assistant U.S. Attorney Susan M. Ringler said as part of a plea agreement with Schmitt that she would ask for a three-year sentence and he will surrender any interest in the three properties he purchased with the stolen money.
Schmitt, who earned $66,890 in his job at the bureau, was a graduate of the Key School in Annapolis and Carnegie Mellon University. He was president of the Saunders Point Community Association last year and lived at home with his mother, 57, and his 2-year-old son at the time he was arrested.
In a prepared statement, Ms. Ringler said Schmitt was highly regarded at the bureau, where he had worked for 10 years before he resigned July 6.
"He consistently received favorable evaluations and worked his way up in the BEP," she said.
She said Schmitt was selected to manage the Threaded Currency Paper project, in which paper with threads was used for test runs of $100 bills. The threads could be detected with equipment available only to federal authorities.
Schmitt smuggled the cash out of the bureau's Washington, D.C., plant in two visits to its second-floor vault last spring, using keys that were available only to him and about five other top-level employees.
He hid the money in a zippered compartment in a briefcase that security guards failed to examine as he left work each day, she said.
Lawrence Zenker, a bureau spokesman, said employees now must put containers and bags carried from the plant at 14th and C streets through an X-ray machine.
Internal Revenue Service agents began looking into Schmitt's activities last May when officials at Annapolis Bank and Trust reported that the long-time customer had deposited $213,787 over two months, most it in crisp $100 bills.
Schmitt admitted the thefts June 16 in a interview with IRS agents, who searched his office, car and bank accounts the same day, Ms. Ringler said.
The agents seized $550,000 in a safe deposit box Schmitt leased at the Citizens Bank of Washington; $80,000 at the Annapolis bank; $11,200 in cash at his office and $676,300 in his 1992 Nissan 300ZX, seized by agents where it was parked about two blocks from the plant.
Ms. Ringler said Schmitt bought a $126,000 condominium in Ocean City, put a $32,000 deposit on a $162,000 vacation property on Cedar Island in Accomack County, Va., and a $5,000 deposit on a $400,000 waterfront home across the street from his mother's house in Saunders Point.