Former TVI Corp. executives plead guilty to fraud

Executives defrauded Glenn Dale manufacturer of more than $1.4 million, plea agreement says

May 04, 2010|By Lorraine Mirabella, The Baltimore Sun

Two former executives of TVI Corp. and their accountant have pleaded guilty to roles in defrauding the Glenn Dale-based manufacturer of more than $1.4 million.

TVI's former chief executive, Richard V. Priddy, 61, of Glenn Dale and the former executive vice president, Charles L. Sample, 62, of Annapolis, as well as their personal accountant, Joseph M. Broullire, 57, of Bethesda pleaded guilty last week to conspiracy to commit wire fraud, the Maryland U.S. attorney's office, the Internal Revenue Service and Federal Bureau of Investigation announced last week. Priddy and Sample also pleaded guilty to filing a false tax return in connection with the fraud scheme, authorities said.

According to plea agreements, Priddy and Sample secretly formed a separate company that would buy parts and resell them for double the price to TVI, a manufacturer of decontamination systems used by emergency workers responding to homeland security incidents. Broullire formed the new company and acted as its representative, according to the agreements. Between 2003 and 2005, the three defendants led TVI to pay $2.5 million for the parts, about $1.4 million more than the price their purchasing company paid, the U.S. attorney's office said.

Priddy and Sample received hundreds of thousands of dollars from the sale of parts to their own company, with Priddy using more than $40,000 in proceeds to buy a yacht, the plea agreement said. Neither Priddy nor Sample disclosed their roles to TVI's board of directors. The U.S. attorney's office said Priddy and Sample also failed to report the income to the IRS.

Attorneys for Priddy, Sample and Broullire could not be reached Monday. A call to TVI, which has changed its name to Immediate Response Technologies Inc., was referred to IRT Chief Executive Officer Lt. Gen. Harley A. Hughes, who also could not be reached Monday.

The company, which had filed for Chapter 11 bankruptcy protection, announced in December that a reorganization of the company and its wholly owned subsidiaries was approved by a judge that month. As part of the plan, the assets and businesses of TVI and wholly owned subsidiary Safety Tech International Inc. were merged to create IRT, which remains based in Glenn Dale, in Prince George's County.

The defendants face a maximum of five years in prison for the wire fraud conspiracy. Priddy and Sample also face a maximum of three years in prison for filing a false tax return. Sentencing has been scheduled for July 22 for Broullire and July 23 for Priddy and Sample.

On March 25, the Securities and Exchange Commission filed a settlement in a separate case against the defendants related to schemes to defraud TVI and its shareholders.

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