2 Guilty in Pentagon Corruption Case

A jury found two former California business executives guilty of conspiracy and wire fraud today in the first trial stemming from the government’s investigation of Pentagon procurement practices.

But the jury, which deliberated more than 35 hours over four days, found George Kaub and Eugene Sullivan, along with a third defendant, innocent of bribery charges.

Dale Schnittjer was acquitted on the bribery charges, along with four other counts. The jury was unable to reach a verdict on one other conspiracy count and one wire fraud count against Schnittjer and the judge ordered those counts dropped.

Kaub and Sullivan were convicted of conspiracy and wire fraud and Kaub was also found guilty on two counts of filing false statements.

Kaub, Sullivan and Schnittjer were all vice presidents of Teledyne Electronics of Newbury Park, Calif., a defense contractor. The government claimed that they conspired to hire a private consultant who in turn bribed a Navy engineer in order to help the firm obtain a $24-million contract to build hand-held radar test equipment.

The defense argued that the businessmen were unwillingly duped by private consultant William Parkin, who actually arranged for the scheme. The defendants knew nothing about illegal efforts to obtain inside information on the contract that Teledyne was awarded in July, 1987, defense attorneys said.

The jury agreed with the government that Kaub and Sullivan had engaged in a conspiracy with Parkin and his associates, all of whom pleaded guilty in advance of the trial before U.S. District Judge Richard Williams.

Kaub and Sullivan were each found guilty of one count of conspiracy. In addition, Kaub was convicted on five counts of wire fraud, while Sullivan was convicted on three wire fraud counts. Those charges stem from the wiretapped conversations between the defendants and private consultants, which were played for the jury and formed a central part of the government’s evidence.

Kaub was also convicted of filing false statements, charges that derived from papers he authorized to be sent to the Defense Department stating that Teledyne had not used private consultants to work on the contract.

Each of the counts carries a maximum penalty of five years in prison and $250,000 in fines. Kaub faces a maximum sentence of 40 years in jail and a maximum fine of $2 million; Sullivan, 20 years and $1 million.

Williams set sentencing for June 7 and allowed the defendants to remain free on bail.