After a three-year investigation code-named ``Ammo Box,'' a federal grand jury in Memphis, Tenn., recently indicted custom molder and mold maker Carl Dean Spruill and his company, Southern Mold Builders. The Jan. 23 indictment contained 26 counts of conspiracy to defraud the U.S. government, money laundering and paying thousands of dollars in kickbacks to obtain government subcontracts to mold parts for Martin Marietta Ordnance System, operators of the Milan Army Ammuni-tion Plant in Milan, Tenn.
Prosecutors claim Southern Mold Builders of Mount Juliet, Tenn., was a participant in a bid-rigging scheme involving more than $200 million in government contracts from 1978-94. This is the most recent indictment filed in this case.
Spruill referred questions to his lawyer, who did not return telephone calls.
Spruill allegedly paid cash kickbacks to Bobby Joe Vasquez, a senior buyer for Martin Marietta, according to the indictment. Vasquez was sentenced on Jan. 4 to one year and one day in prison
and three years supervised re-lease and fined $7,500. He also was ordered to forfeit $52,400 for orchestrating the scheme along with Frederick Raymond Isaacs, a sales representative for several companies involved in the fraud including Southern Mold Build-ers, according to information released by the U.S. Attorney's Office in Memphis.
Isaacs, who pleaded guilty to conspiracy to defraud the government, was sentenced to 21 months in prison, with two years supervised release. He also was fined $50,000 and ordered to forfeit $1 million in cash.
The U.S. Attorney's Office said Isaacs and Vasquez manipulated contract awards by circumventing the sealed bid process used by the government and its prime contractors. The conspiracy in-volved several manufacturing firms for which Isaacs was an independent sales representative.
In return for the award of the subcontract, the supplier would pay Isaacs a percentage of the total contract price, an amount that varied from 5-50 percent of the total.
These ``sales commissions'' then were included in the subcontract price that was eventually billed to the U.S. Army, according to the U.S. Attorney. Isaacs kicked back a portion of these sales commissions to Vasquez in the form of cash or other items of value, to ensure the subcontracts went to Isaacs' clients, according to a news release from the U.S. Attorney's office. Vasquez then ``laundered the money through his business accounts in order to conceal the source and nature of the payment,'' according to the news release.
Two other men, Carl Jennings Bryant, a former employee of the Milan plant, and John Ray Cobbs, an Ohio defense contractor, also were convicted. Another supplier, James R. Huntley Jr. of Huntley Industries Inc. in Monroe, N.C., pleaded guilty to one count of conspiracy and agreed to pay a $95,000 fine.
The investigation is continuing and more indictments are expected to be handed down, according to the U.S. Attorney.