Firm fined $350,000 in conspiracy scheme 3 others sentenced in scheme designed to win Navy contracts.

June 04, 1991|By Kelly Gilbert | Kelly Gilbert,Evening Sun Staff

Automated Sciences Group Inc., of Silver Spring, has been fined $350,000 for its involvement in an influence-peddling scheme perpetrated by the company's owner and former president with a former Navy civilian official in an attempt to gain influence on minority defense contracts.

Judge Frederic N. Smalkin, in U.S. District Court in Baltimore said ASG "has been a leader in the minority contract field and has performed satisfactorily" on its Navy contracts.

But, he said, "minority companies have to know they must resis the pressure" to use corrupt means to beat out their competition."

In related sentencings, Smalkin:

*Fined Conrad Hipkins, ASG's founder and sole stockholder $10,000, ordered him to serve 45 days in jail and six months of community service, and placed him on two years' probation on a 10 1/2 -month suspended prison term.

*Fined Clarence Braddock, the company's former president $2,500, put him on two years' probation on a six-month suspended prison term and ordered him to perform 300 hours of community service.

*Fined Louis J. Rainey, a marketing consultant, $5,000 and placed him on a year of probation on a three-month suspended prison term.

Hipkins and ASG were convicted in March of conspiracy to bribe Richard Ramirez, former director of the Navy's Small and Disadvantaged Business Utilization Office, in return for Ramirez' influence in helping the $32 million-a-year software company obtain about $8 million worth of Navy contracts between 1982 and 1987.

Rainey, who funneled $100,000 in bribes from ASG to Ramirez, and Braddock, who gave most of the bribe money to Rainey, pleaded guilty to criminal charges and testified for the government at the Hipkins-ASG trial.

Defense attorney Michael Schatzow, near tears, pleaded for mercy from the court at


He said Hipkins' conduct was "an astounding aberration" for a black man who has spent his life building his company and helping other minority contractors negotiate the federal contracting morass on the road to success.

"He built this company up to be a symbol, and sent the message to young black businessmen that if you play by the rules and work hard in the system, you can get ahead," Schatzow said. "That's what he's destroyed."

Prosecutor Dale P. Kelberman countered, "These bribes hurt the very companies Mr. Hipkins, on the outside, was trying to help. In doling out ASG's bribe money, he put his thumb on the scales."

James Hellauer, ASG's chief executive, told Smalkin that the company's fine would hurt "a lot of good people doing good work.

"The tragedy is, key people left [in the wake of the criminal prosecution], the company has lost its credit lines and lost its reputation.

"We intend to come back," Hellauer said. "But we are living on cash flow generated by our accounts receivable."

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