Executives Sentenced, Company Fined for Selling Used Jets Parts
Aug. 16, 1988
LOS ANGELES (AP) _ A defense contractor was fined $1 million and two executives received jail terms for selling the Pentagon used jet parts as new.
The company, Consolidated Aeronautics Corp. of North Hollywood, also was ordered Monday to pay the Defense Department $987,000 in restitution.
''This kind of crime strikes at the very heart of our national security system,'' U.S. District Judge A. Wallace Tashima said.
''The integrity of the defense contracting system depends on the integrity of the military procurement officers and the honesty and reliability of defense contractors.''
Consolidated's $1 million contract with the Pentagon called for new parts, but instead it supplied used, refurbished or altered parts for the military's A-7, F-104 and F-4 jets, said Assistant U.S. Attorney William Fahey.
The parts, which included a tail assembly for the F-104 and a key component of the A-7's stability system, were critical items, and Navy fliers could have been killed if the parts were used, the prosecutor said.
None of the parts were used in jets because they failed to pass military tests, Fahey said.
Company executives said the parts were not deficient and would not have endangered lives.
Vice President Ronald Guy, 43, was sentenced to a year and a day in jail, fined $50,000, placed on three years' probation and ordered to perform 150 hours of community service, Fahey said.
President Gordon Strube, 69, was sentenced to six months in a halfway house, fined $300,000, placed on five years' probation and was ordered to complete 1,000 hours of community service, the prosecutor said.
Guy had admitted to conspiracy, making a false statement and making a false claim. Strube pleaded guilty to conspiracy and accessory to making a false claim and making a false statement.
The company pleaded guilty in May to conspiracy, making false statements to the U.S. government and making false claims.