A former Bata Shoe Co. purchasing agent pleaded guilty today to a federal felony count of soliciting and accepting kickbacks from suppliers on a Defense Department boot contract.
Bell Container Corp., of Newark, N.J., and Kurt Faulhammer, 49, owner and president of K&R Fabrics, in Wilbraham, Mass., also pleaded guilty today to felony charges of paying kickbacks to the purchasing agent, Alvin Grieninger, 58, of Havre de Grace, in return for orders for boxes and fleece that Bata used to make and ship cold-weather boots to the military.
Faulhammer was to be sentenced late today. Judge Marvin J. Garbis set sentencing April 5 for Grieninger and April 12 for Bell Container in U.S. District Court in Baltimore.
Bell Container's board of directors agreed to pay a $100,000 fine in the case. Vice President Richard Brateman entered the company's guilty plea.
Assistant U.S. Attorney William K. Meyer said he will recommend a prison term of six to 16 months for Grieninger and two months' incarceration for Faulhammer. In addition, each defendant faces a maximum $250,000 fine, three years on supervised release and possible restitution.
Defense attorney Andrew Jay Graham told Garbis at the plea hearings that Grieninger "never had to go out of his way" to solicit the kickbacks from the suppliers.
But Meyer said Grieninger solicited $37,562 in kickbacks from at least eight Bata suppliers on defense and commercial subcontracts between 1985 and 1989, deposited the money in his own bank accounts for personal use and failed to declare it on his income tax returns.
Local attorney Charles P. Scheeler, who represents Bata, said today that the company "considers itself to be a victim" of Grieninger's illegal activities. Bata was not charged in the kickback schemes.
Another former Bata purchasing agent, Zdenek Formanek, of Aberdeen, who later worked for Bell Container as a salesman on the Bata account, is awaiting trial for paying kickbacks to Grieninger in return for favored treatment as a defense subcontractor to the shoe company.
Meyer said Grieninger received $16,000 in kickbacks from Bell Container through Formanek and $8,536 in kickbacks from Faulhammer.
Grieninger's schemes were discovered when he solicited kickbacks from Ray Dunphey, president of Northeast Textiles Inc. in Linden, N.J., in 1989. Dunphey reported the solicitation to the Defense Criminal Investigative Service and paid Grieninger $2,800 in kickbacks while agents recorded their conversations on audio and video tapes.