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An armored military Humvee is pictured. Photo via Flickr.
The former owners of a Pittsburgh-area military supplier have been accused of defrauding the U.S. government of more than $6 million in defense contract work.
According to paperwork released by the Department of Justice (DOJ) on Friday, Thomas G. Buckner, 65, of Gibsonia, and his brother, John P. Buckner, 67, of Lyndora, Pa., are among five individuals charged with crimes of "major fraud" against the U.S. Department of Defense.
As co-owners of Ibis Tek -- which has locations in Middlesex and Clinton townships, Butler County -- the Buckner brothers were subcontracted by the Department of Defense (DOD) and U.S. Army Tank-Automotive and Armaments Command (TACOM) to create emergency escape window kits for military Humvees.
Prosecutors allege the Buckners inflated the cost of the work by falsifying invoices to make it appear as though they had spent $70 per window frame for the materials when in fact they had paid just $20 each for frames manufactured in China. The brothers are also alleged to have sold scrap aluminum collected in the manufacturing process without crediting that money to TACOM. The losses to TACOM are placed at $6,085,709 by the DOJ.
Ibis Tek's business was sold in February 2017 to a group of independent investors, amid ongoing criminal investigations into the Buckners.
A spokesperson for Ibis Tek said the new owners and management teams have "sterling reputations," adding, "we look forward to driving Ibis Tek, Inc. into the future." The spokesperson went on to say that Ibis Tek continues to service all business and contracts served by Ibis Tek under the Buckners.
The case involving the Buckner brothers is far from the first to reveal allegations of fraud and impropriety in defense or military contracts, however.
A quick Google search of "defense contract fraud" turns up a number of cases involving over-inflated prices and massive taxpayer losses.
In 2014, a defense contractor responsible for providing food and water to troops in Afghanistan pleaded guilty to over-charging the U.S. government to the tune of $48 million.
This week, two San Diego defense contractors pleaded guilty in a scheme that defrauded the Navy out of at least $1.4 million by over-billing for supplies that the military never ordered, the San Diego Union-Tribune reported. Similar stories have cropped up in Florida, California, Maryland, North Carolina and elsewhere in recent years, renewing calls for systemic reforms.
A 2011 DOD report found hundreds of defense contractors that defrauded the U.S. military subsequently went on to receive more than $1.1 trillion in new Pentagon contracts between 2000 and 2010, Sen. Bernie Sanders' office reported at the time.
"The ugly truth is that virtually all of the major defense contractors in this country for years have been engaged in systemic fraudulent behavior, while receiving hundreds of billions of dollars of taxpayer money," Sanders added. "With the country running a nearly $15 trillion national debt, my goal is to provide as much transparency as possible about what is happening with taxpayer money."
In the years since, attempts at various reforms have been made, including attempts to up punishments for offenders and make the process more transparent. But critics say more still needs to be done to cut down on fraud and the government waste it produces.
If convicted of fraud in a Pittsburgh federal court, the Buckner brothers face up to 20 years in prison and $1.5 million in fines.
Also charged Friday were Ibis Tek's former CFO, Harry Kramer of Wexford, Pa., and Anthony Shaw, a former deputy project manager at TACOM responsible for government contracts like the Buckner brothers' involving combat vehicle systems such as Humvees.
According to a DOJ release, Shaw, 55, of Rochester Hills, Michigan, demanded and received a total of $1,055,500 in illegal gratuities from Thomas Buckner, while also failing to report that money to the IRS. Shaw is also charged with making false statements after he denied having socialized with Thomas Buckner and John Buckner, and denied that he had traveled in a car, boat and an airplane owned by the brothers.
A fifth man, David S. Buckner, of Warren, Michigan -- no relation to the Buckner brothers -- is charged with helping to funnel and obscure payments from the Buckners to Shaw.
The three co-defendants face between 3 and 19 years in prison.
A department release further explaining the charges against all five men is embedded below.
UPDATE: This article has been updated to clarify Ibis Tek's locations. It has also been updated to reflect an ownership change at Ibis Tek and to include comment from current management.
Five Charged in $6M DOD Fraud by PennLive on Scribd