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Defense contractor admits to bid rigging
Question of the Day
A former executive of a Long Island, N.Y., defense company pleaded guilty yesterday in federal court in a scheme to rig bids on military contracts for products used to secure cargo on vehicles, vessels and aircraft and for soliciting a kickback on those contracts.
“The antitrust division is committed to protecting the competitive market for Americans,” said Assistant Attorney General Thomas O. Barnett, who heads the department’s antitrust division. “We will continue to bring to justice those who rig bids and thereby deprive the public of the benefits afforded by a competitive bidding process.”
A three-count felony indictment said Fischetti took part in two conspiracies to rig bids on military contracts for tie-down equipment and cargo-securing systems, conspiring to rig bids between December 2002 and January 2004 on contracts for metal sling hoist assemblies sold to the U.S. Navy.
Justice officials said a metal sling hoist assembly is a wire rope basket-type sling, used to transport bombs, munitions and other items. They said that from November 2001 through January 2005, Fischetti entered into and carried out a separate agreement to rig bids on six types of tie-down equipment and cargo-securing systems sold to the Defense Department.
In addition, they said, Fischetti, a subcontractor employee, solicited and accepted a kickback from another lower-tier subcontractor in 2002 in return for favorable treatment in the awarding of subcontracts for finishing work on products supplied to the Defense Department.
Under the plea agreement, which is subject to court approval, Fischetti agreed to cooperate with the department in an ongoing investigation.
The Fischetti case is the third to arise from an investigation into the military-restraints industry. In February, two Pennsylvania executives, Thomas Cunningham and Richard Barko, pleaded guilty to rigging bids on U.S. Navy contracts for metal sling hoist assemblies and are awaiting sentencing.
Fischetti is charged with two counts of bid rigging in violation of the Sherman Act and with soliciting and accepting a kickback in violation of the Anti-Kickback Act. Each count of the Sherman Act carries a maximum sentence of 10 years of imprisonment and a fine of $350,000 for individuals and $10 million for corporations. The Anti-Kickback Act carries a maximum sentence of 10 years imprisonment and a fine of $350,000.
Justice Department officials said that under both statutes, the maximum fine may be increased to twice the gain derived from the crime or twice the loss suffered by the victims of the crime, if either of those amounts is greater than the statutory maximum fine.
The investigation is being conducted by the Justice Department’s National Criminal Enforcement Section in the antitrust division and Defense Department’s Criminal Investigative Service.
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