Six men charged in kickback scheme involving Boeing satellites

Six men charged in Boeing kickback scheme

A Boeing Co. employee and five others have been charged in an elaborate kickback scheme that involved illegally securing satellite-related contracts in exchange for cash, the U.S. attorney's office in Los Angeles said Thursday.

The scheme centered on contracts with El Segundo-based Boeing Space and Intelligence Systems, a division within Boeing that supplies satellites and satellite parts to government entities, including NASA.

Court documents allege that the kickback scheme ran from 2005 to 2012 and began when Mark Allen, 60, a Boeing procurement officer at the time, agreed to funnel purchase orders to subcontractors represented by Raymond Joseph, 66, an independent sales rep, according to the U.S. attorney's office.

Joseph was the middleman, court documents allege, telling his subcontractor clients that they could secure contracts if they paid kickbacks through him to Allen.

In exchange, Allen gave Joseph's clients information that gave them an "improper advantage" in bidding on purchase orders, according to court documents.

Allen awarded one of Joseph's clients, A&A Fabrication and Polishing Inc., about $4.5 million total in Boeing purchase orders. In exchange, Alfred Henderson, 60, vice president of A&A, paid about $650,000 to Joseph and more than $100,000 to Allen, documents allege.

They kept up the ruse with courtesy bids, given by Joseph to Allen, that made it look like Allen had engaged in a competitive bidding process, as required under Boeing's procurement rules, documents allege. In reality, there was no competitive bidding process, according to court documents.

In 2009, A&A, which operates in Whittier and Montebello, was prohibited from receiving Boeing work orders because of prior work quality and performance issues.

Henderson allegedly continued to do business through a "front," Nace Sheet Metal Co., which was an office furniture manufacturer located in Anaheim and owned and operated by Cesar Soto, 47, of Chino.

Court documents allege that Soto and A&A employee Randy Mitchell, 62, of Whittier, misrepresented that A&A's facility was actually operated by Nace.

Henderson was arrested Monday and arraigned on a 15-count grand jury indictment. A&A is also charged in the indictment.

Zenitram Engineering and Manufacturing, based in Torrance and owned by Noberto Martinez, 53, was another of Joseph's clients. Martinez was charged with conspiring to pay kickbacks to Allen and issuing false tax forms to Joseph. He has signed a plea agreement and is scheduled to make his first court appearance on April 13.

Allen, who is no longer with Boeing, Soto, Joseph and Mitchell previously pleaded guilty and are awaiting sentencing. Documents related to those proceedings were recently unsealed.

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Copyright © 2016, Los Angeles Times


1:50 p.m. Friday: This story was updated with Allen's current employee status with Boeing.

A previous version of this story was published April 2.