April 22, 13

NEWS / Defense contractors plead guilty to invoice fraud

Two brothers who headed a defense contracting firm have pled guilty to charges of fraud and conspiracy in a case that involved the contractors sending invoices for inappropriate expenses, such home improvements, to the federal government, and forging at least one invoice for work that had never been performed. The former contractors have agreed to pay $4.1 million in settlement fees, but still face up to 15 years in prison.

William Kuchera, 58, and Ronald Kuchera, 51, each pled guilty last week before US District Judge Kim Gibson. The brothers were released on a $10,000 bail, with sentencing scheduled for October.

The Kucheras agreed to pay $1.4 million in criminal fines, civil forfeiture and unpaid taxes, as well as $2.7 million to settle the government’s allegations under the False Claims Act.

The brothers owned Kuchera Defense Systems Inc., a contractor for the Department of Defense. According to the prosecutors, the company sent cost certifications for inappropriate personal expenses, such as private airplane and car leases, home improvements, vacations to Jamaica and lobbying fees, to the federal government.

The prosecution also alleges that the two brothers issued a false $650,000 invoice to Coherent Systems International Inc., a US Air Force contractor, for work on an $8 million contract that had never been performed. The Kucheras are alleged to have paid $200,000 to the other contractor as a kickback.

The contract involved Ground Mobile Gateway Systems, an attempt to develop a new kind of unmanned vehicle that would coordinate air strikes and prevent friendly fire incidents. Prosecutors say the component the Kucharas sought payment for was neither manufactured nor delivered to Coherent Systems International Inc.

The owner of Coherent Systems International Inc., Richard S. Ianieri, is currently serving five years of probation after pleading guilty in 2009 to soliciting the $200,000 kickback.

“The Kucheras cheated the government by claiming improper reimbursements, submitting a false invoice and then kicking back $200,000 to the prime contractor,” Pittsburg US Attorney David J. Hickton stated, as quoted by Law 360. “Such blatant and outrageous fraud against the United States cannot and will not be tolerated.”

In turn, Stanton D. Levenson, an attorney for Ronald Kuchera, noted that his client’s guilty plea “speaks for itself” and that he will try to underscore the high quality and usefulness of the military products his client’s company provided, as well the numerous contributions and charitable good works his client had made to the community.

“With all of the relevant information, I am confident the court will fashion a sentence which will temper justice with mercy,” Levenson said.