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Former Executives of Aerospace-Parts Company Sentenced for Graft

August 26, 1992

SEATTLE (AP) _ A federal judge has spared three former aerospace industry executives from jail following their guilty pleas to tax fraud charges involving the use of prostitutes, cash and other gifts to win business.

U.S. District Judge Barbara Rothstein on Tuesday sentenced the former officials of VSI Corp. to periods of home detention and probation, and ordered them to perform community service and to make restitution.

The three men, all California residents, pleaded guilty July 5 to conspiring to defraud the federal government between January 1982 and December 1988. Carson, Calif.-based VSI is the world’s largest maker of high-tech nuts, bolts and rivets.

The fraud involved the reporting of $374,895 in illegal business expense deductions on federal tax forms, which resulted in a $127,705 loss to the government.

Rothstein sentenced Thomas F. Spoehr to 10 months confinement in his home, five years of probation and 200 hours of community service, and ordered him to pay $65,000 for his part in the conspiracy. Spoehr, 66, was VSI’s president from 1980 to 1989.

G. Boyd Sellers, 60, and Ronald A. Wheeler, 50, were each sentenced to 120 days’ home confinement, five years’ probation and 200 hours community service, and were ordered to pay $10,000 restitution. Sellers was a vice president of sales at VSI from 1983 to 1991, while Wheeler was vice president of product engineering and technical sales from 1986 to 1989.

Prosecutors said VSI customers’ employees were lavishly entertained in order to gain their business.

Scores of business favors, which included trips and use of a condominium in Marina del Rey, Calif., were falsely deducted as legitimate travel and entertainment expenses. Most of the recipients of the favors and their companies were not identified.

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