A Maywood firm has been indicted by a federal grand jury in Los Angeles on charges of defrauding the Defense Department out of about $375,000 on contracts for aviation hose assemblies, tank gear carriers and automotive maintenance work.
Rodney Hansen, special agent in charge of the Southern California office of the federal Defense Criminal Investigative Service, said Wednesday that the indictment handed down earlier in the week charges the SME Prime company and its owner, Roger L. Edmonds, with conspiracy, false claims, false statements and mail fraud.
Hanson said the firm deliberately made low bids in order to secure the contracts and then submitted false progress reports in order to collect so-called “progress payments” that were provided for in the contract.
He said the firm obtained the maximum amount of progress payments--typically about 95% of the total for an entire contract--without actually performing any substantial work. Hansen said SME listed phony labor, material and construction costs.