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URGENT Three More From GE Face Charges Of Defense Contract Fraud

July 16, 1985

PHILADELPHIA (AP) _ The former No. 2 man at General Electric’s Re-entry Systems Division and two managers were indicted Tuesday on charges of conspiring to defraud the Defense Department of $800,000 in a missile contract.

The three ranked above two one-time GE employees indicted with the company in March, according to U.S. Attorney Edward G. Dennis Jr.

The fraudulent billing involved a $47 million contract to refurbish the Minuteman Mark-12A intercontinental ballistic missile at GE’s suburban King of Prussia plant, the government said.

The new charges were brought against Thomas E. Shaw, 54, of Lexington, Mass., the former No. 2 man at the division; Forrest J. Yocum, 51, of Newtown Square, currently a manager of programs engineering for GE; and Richard S. Davis, 53, of Springfield, formerly a manager of systems engineering.

A federal grand jury charged them with conspiracy, four counts of making and presenting false claims to the government, and five counts of making false statements to a U.S. government agency.

Dennis said in a statement that Davis ″has agreed to enter a plea of guilty and cooperate with the government.″

GE pleaded guilty in the case May 13 and was fined $1.04 million.

Also included in the indictment was Joseph Calabria, 50, of King of Prussia, the division’s chief engineer.

Calabria was indicted in March with the company and is to stand trial Thursday before U.S. District Judge Louis Bechtle. The charges in Tuesday’s indictment, which supercede the March indictment, are the same - two counts of perjury before a federal grand jury.

If convicted, Shaw and Yocum face maximum penalties of 50 years in prison and a $100,000 fine. Davis and Calabria each faces a maximum penalty of 10 years imprisonment and a $20,000 fine.

Wayne R. Alford, acting special agent in charge of the FBI’s Philadelphia office, said the investigation was continuing.

Assistant U.S. Attorney Ewald Zittlau said the head of the re-entry division at the time the alleged fraud occurred, Lad Warzecha, had not been indicted.

The fraud involved ″mischarging″ of cost overruns from one contract to a separate contract, Dennis said. The overcharges came on a contract to refurbish re-entry systems on the Minuteman missiles between June 22, 1980 and April 19, 1983. In the alleged scheme, GE falsified employee time cards.

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