A federal jury convicted two former Maryland businessmen yesterday of selling worthless performance bonds to contractors working on government projects.
Jurors deliberated six hours in U.S. District Court in Baltimore before returning verdicts against Sammy Claude "Ted" West, 50, and Larry Wright, 39, both of Jacksonville, Fla., on conspiracy to file false statements on documents and six related felony charges.
West faces a maximum 25 years in prison and Wright 20 years when they are sentenced June 22 by U.S. District Judge Frederic N. Smalkin. They remain free on their own recognizance until sentencing.
Federal officials said a company operated by the pair received $1.14 million for providing bonds on 46 contracts worth $22.8 million from 15 government agencies between 1986 and 1988.
They sold worthless bonds on contracts for the Army, Air Force, Department of the Interior, National Park Service, General Services Administration, National Aeronautics and Space Administration, Veterans Administration and the Smithsonian Institution.
The bonds were supposed to ensure that work on projects would be completed and subcontractors paid if the contractor encountered financial problems. But federal prosecutors said the bonds were worthless because the men had no money to back them up.
NASA has filed a $6.1 million federal lawsuit in Fresno, Calif., against a company operated by West and Wright because a contractor it had bonded defaulted on a $16.1 million contract to build a test facility.
During the two-week trial, Assistant U.S. Attorneys Susan M. Ringler and Stuart A. Berman portrayed West and Wright as con men who took advantage of agencies that failed to check financial information submitted by sureties.
But defense attorneys Peter D. Ward and Atiq R. Ahmed characterized them as good businessmen who were targeted by large corporate sureties that wanted to put them out of operation.
Prosecutors presented evidence that West and Wright had filed affidavits to federal agencies putting their net worth at $2.3 million each in 1986, when there were no records to support this.
Mr. Berman said each of the men claimed to own 750 acres of land in Laurel County, Ky., worth $2.25 million. But an official from Laurel County testified that land and tax records listed someone else as the owner of the 1,500 acres, and that neither West nor Wright was ever listed as a landowner in the county.