Firm guilty of cheating Pentagon Contractor sold substandard parts

September 05, 1992|By Norris P. West | Norris P. West,Staff Writer

Defense Department investigators are trying to identify weapons built with substandard nuts and bolts supplied by a convicted Hampstead defense contractor.

William P. Christensen, agent-in-charge of the Defense Criminal Investigative Service in Baltimore, said yesterday that inferior commercial fasteners need to be replaced with military-strength parts to ensure the safety of weapons in use on land, air and sea.

Mil-Spec Fasteners Corp. and its operators pleaded guilty in U.S. District Court in Baltimore yesterday before Judge Benson E. Legg on charges of fraud and conspiracy to commit fraud for illegally using the the weaker commercial fasteners for military machinery.

"It's great that we've stopped Mil-Spec from selling the fasteners, but there still might be a helluva lot of damage out there," Mr. Christensen said.

He said investigators have not traced any military accidents to the faulty parts, but are concerned about the potential for danger.

Mr. Christensen said defense investigators are working with companies that subcontracted defense work to Mil-Spec to identify the military equipment built with Mil-Spec nuts, bolts and screws.

George Yezulinas, 51, owner and president of Mil-Spec, his son, George Yezulinas Jr., 29, and Philip Karpovich, 49, the company's vice president, each pleaded guilty to fraud and conspiracy charges. Their sentencings are set for Nov. 20.

Yezulinas and his son both face a maximum 10-year prison sentence and $500,000 fine. Karpovich could receive five years in prison and a $250,000 fine. The company itself could be fined $1 million.

Mil-Spec was a subcontractor for several companies that built weapons for the Defense Department over the last several years. Among its customers were Westinghouse Electric Corp., Martin Marietta Corp. and BMY, according to a statement of charges prepared by Assistant U.S. Attorney Ira L. Oring.

Mil-Spec fasteners were used for sonar systems, satellites, armored earth-movers, torpedo warheads, howitzers, the Trident submarine and radar systems on F-4 aircraft that detect enemy fighters and oncoming missiles, Mr. Oring said.

The company generated about $4 million of revenue a year between 1988 and 1991. Mr. Christensen estimated that half of that income was from defense contracts.

During that time, Yezulinas and his son ordered employees to disguise the commercial fasteners to give them the appearance of military-strength parts. Karpovich filled orders that he knew were fraudulent, court papers say.

For instance, Mil-Spec sold 2,000 commercial-grade, head-cap screws to Babcock & Wilcox for the Navy's Torpedo Mark 48 warhead in January 1991, according to court papers. The company charged Babcock & Wilcox 10 times the amount it paid for the screws and sent along a document falsely stating that the screws met military specifications.

The company routinely camouflaged commercial fasteners by using chemicals and paint to turn zinc-plated parts gold, giving them the appearance of stronger cadmium-plated parts, court papers say.

Federal prosecutors will argue at sentencing that the company's practices showed "conscious and reckless" risk of injury to members of the military who operate the equipment, said U.S. Attorney Richard D. Bennett.

He and Mr. Christensen said officials here were intensifying their investigation of defense-contract fraud by Maryland companies.

"The implications of this type of fraud go to the very fabric of military equipment in this country," Mr. Bennett said. "The [contract procurement] process has become quite tainted."

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