Former Morton Thiokol Employee Charged In Alleged Kickback Scheme
SALT LAKE CITY (AP) _ A former Morton Thiokol Inc. purchaser and eight defense subcontractors were charged Friday with operating a kickback scheme against Morton Thiokol and the federal government, authorities said.
U.S. Attorney Brent Ward said that for about three years, former buyer John E. Ward charged kickbacks from suppliers and earned illegal profits by routing materials through three companies he secretly created and operated from his basement.
A 98-count indictment, unsealed Friday, names eight other individuals as defendants, in addition to Ward and eight companies.
The scheme involved routine supply materials, such as batteries, paper towels and strapping material, used during the manufacture and development of space shuttle booster rockets, Navy Trident missiles and the Air Force’s new Small Intercontinental Ballistic Missile, nicknamed the ″Midgetman.″
Neither Morton Thiokol itself nor any other current or former employees were named in the indictment.
John Ward was charged with 11 counts of mail fraud and 16 counts of wire fraud. The supplies were purchased for use at the Chicago-based aerospace company’s Wasatch Operations in northern Utah.
During a brief hearing Friday, Ward said he had not obtained an attorney, and arraignment was rescheduled for Monday. U.S. Magistrate Ronald Boyce ordered that in the meantime, Ward could be released on a $15,000 signature bond and $1,500 cash deposit.
Although he did not formally enter a plea, Ward told the Boyce, ″I am not guilty.″
Two other defendants, Helmut and Allison Reinicke of Salt Lake City, partners in Progressive Machine Inc., one of the eight companies under indictment, pleaded not guilty before Boyce. Allison Reinicke was charged with nine counts of aiding in a kickback scheme. Helmut Reinicke was charged with seven counts of the same offense.
Boyce also ordered the couple released on bond.
The other six individuals named in the indictment, all accused of paying kickbacks, were to appear in court later.
Brent Ward said investigators had not been able to determine how much money John Ward made, but said that in individual transactions they had been able to trace, the kickbacks ranged from ″a few dollars to several thousand dollars.″
After leaving Thiokol in May 1986, John Ward continued his scheme by selling to Thiokol through the companies he had formed, prosecutors accused. He had joined the company in 1979 as a buyer.
The charges were the result of a 14-month investigation by the FBI and five other federal agencies which was launched after John Ward left the company in May 1986, Brent Ward said.
Individuals and companies charged with paying kickbacks include: Evelyn Deese, president of ACME Seal and Fastener Inc. of Arlington, Texas; J. Paul Levine, president of New Haven Moving and Equipment Co., Los Angeles; Harold Stites of Ogden, Utah; Leo Engel, president of Wholesale Forklift Parts Co. Inc., Salt Lake City; Forman Dawson, owner and president of L&B Machining and Manufacturing Corp. of Placentia, Calif.; and Ira Kenneth Martin, a partner in Complete Industrial, one of the firms allegedly created by John Ward.
The other two companies under indictment, allegedly created and controlled by John Ward, were D Jones Co. and Unisupply, both of Salt Lake City.