In a brazen criminal scheme to defraud taxpayers, one of the highest-ranking officials in the U.S. Immigration and Customs Enforcement agency pleaded guilty Tuesday in federal court to helping embezzle more than $500,000 from the federal government.

Over three years, James Woosley and at least five other ICE employees scammed the agency by fabricating expenses for trips that were never taken and for hotel, rental car and restaurant expenses that did not exist, according to court records.

His son, also named James Woosley, and live-in girlfriend, Lateisha Rollerson -- both ICE employees -- allegedly ran the scam out of the elder Woosley's two Virginia homes.

Here's how it worked, according to court records:

ICE employees traveled to Washington, D.C., on business, but instead of staying at a hotel, they stayed with Woosley. Rollerson allegedly created false receipts from hotels like the local Marriott, while Woosley approved their fraudulent expense reports and charged each employee a kick-back fee for half the amount.

Prosecutors accused Woosley of receiving about $188,000, some of which he used to buy a new house and a boat.

Sources inside ICE tell Fox News the scam represents total breakdown of oversight within the agency, especially given the periodic background checks and financial examinations given to agents working within the sensitive Office of Intelligence. 

"It tells us that the vetting process and the checks and balances, the internal controls at ICE, obviously are inadequate," said Rep. Candice Miller, R-Mich., who sits on the House Committee on Homeland Security.  

"It's bad enough you find some employees, federal employees, who are misusing taxpayer dollars," Miller said.  "However, in this case, these are ... intelligence officers that are handling classified information."

One ICE employee involved was Ahmed Abdallat, the agency's intelligence supervisor in El Paso, Texas. Abdallat, a former colonel in the Jordanian Air Force, joined the agency in 1995 and worked throughout the Middle East, including three years in Saudi Arabia.

Abdallat's salary was by no means enough to make him rich, yet in 2010 he made three wire transfers to Middle Eastern accounts totaling $570,000, and he maintained personal accounts in Jordan totaling $1.2 million, authorities say.

Shannon Enochs, an FBI special agent, said during a lengthy court hearing that the FBI does not know where Abdallat got the money but doubted he made it working as a civil servant within the U.S. or Jordanian governments.

Abdallat travelled to D.C. at least 13 times in 2009 and 2010. Each time he submitted travel vouchers that allegedly contained fictitious charges not supported by any receipts or fake receipts created by Rollerson on her home computer. Each time, ICE paid.

More serious, however, were his trips to Jordan. Federal prosecutors charged him with eight counts of misusing a diplomatic passport he was not supposed to have to fly to Jordan.

During a search warrant of Abdallat's home in El Paso, the FBI reported pulling out 29 boxes of evidence, including two Jordanian passports he denied having during background checks in 2000, 2005 and 2010. He also denied having foreign bank accounts, though the FBI found several written in Arabic after serving their search warrant.

As a life-long intelligence officer with clearance to secret and classified papers on terrorism, narcotics and human smuggling along the Southwest border, Abdallat's file should have received priority review. Instead, he maintained close personal and financial ties to Jordan, apparently without suspicion.

Four of the five suspects indicted by the U.S. Attorney's Office in this ICE scam already pleaded guilty to embezzlement and received one to two years in prison.Â