Correction: Humvees-Defense Fraud story
PITTSBURGH (AP) — In a story March 3 about fraud charges against officials at a firm contracted to produce Humvee parts for the military, The Associated Press erroneously reported that a manager at the government facility that prosecutors said was defrauded, and a businessman friend, were also charged in the scheme. Former Defense Department employee Anthony Shaw, of Rochester Hills, Michigan, was charged in a separate case with receiving over $1 million in illegal gratuities from the firm's owners, and businessman David Buckner, of Warren, Michigan, with unlawfully acting as the intermediary in those payments. Though announced at the same time, the charges involving the gratuities were not related to the window fraud case.
A corrected version of the story is below:
Brothers accused of overcharging US for Humvee parts
Two brothers who own Pennsylvania military supplier accused of defrauding US of $6 million in contract for Humvee parts
By JOE MANDAK
Associated Press
PITTSBURGH (AP) — Two brothers who own a military-supply business have been charged with a $6 million scheme to overcharge the Defense Department for Humvee window kits, federal prosecutors said Friday.
Thomas Buckner, 65, of Gibsonia, and John Buckner, 67, of Lyndora, defrauded the U.S. Army Tank-Automotive and Armaments Command out of the money with the help of a shell company, according to court documents filed Friday by federal prosecutors in Pittsburgh.
The Army agency, also known as TACOM, is based in Warren, Michigan.
In a separate case not related to the alleged window fraud scheme, Anthony Shaw, 55, of Rochester Hills, Michigan, a former civilian deputy project manager at TACOM, was charged with accepting more than $1 million in illegal gratuities from the brothers.
Defense attorneys for the five defendants didn't return calls or emails seeking comment on the charges.
Prosecutors filed the charges in criminal informations, documents that are typically used when defendants have agreed to plead guilty to the charges.
The window scheme worked this way, according to prosecutors' court filing:
The Buckners co-own Ibis Tek, a Butler company that had contracts to supply window kits for Humvees.
The brothers inflated their costs to manufacture the kits by creating another company called Alloy America. Instead of manufacturing the aluminum frames, Alloy America purchased them for $20 each from a Chinese firm, then created records to make it appear Ibis Tek had paid Alloy America $70 for each frame.
Ibis Tek then passed on the $70-per-frame cost to TACOM.
The Buckner brothers also sold scrap aluminum relating to the manufacture of the frames but kept the money. The Buckners and Ibis Tek were supposed to credit the scrap revenue to TACOM as a way of helping the government agency control costs.
In addition to charges of fraud, the brothers are accused of income tax evasion.
Ibis Tek's chief financial officer, Harry Kramer, 55, of Wexford, was charged with helping the brothers carry out the fraud scheme and filing false tax returns that understated Ibis Tek's income in 2009 and 2010.
The company itself was not charged with any violations. It was not immediately clear if it remains a government contractor. Nobody returned a call to the company Friday.
The Buckner brothers each face up to 20 years in prison and fines up to $1.5 million, while Kramer faces up to 16 years in prison and a $1.5 million fine
In the illegal gratuities case, the government alleged payments to Shaw were funneled through a Michigan motorcycle business, D & B Cycle Parts and Accessories. That business is owned by David Buckner, of Warren, Michigan, described as a friend of Shaw's who is not related to the Pennsylvania brothers.
Shaw faces up to 19 years in prison and a $1.25 million fine if convicted of receiving a gratuity as a public official, tax evasion and making false statements.
David Buckner faces up to three years in prison and a $250,000 fine on a charge of interfering with the Internal Revenue Service.
