3 Unisys Officials Named in Fraud Probe

In an apparent indication of the prosecution’s next thrust in the massive Pentagon fraud investigation, the government released documents Friday detailing a scheme involving three previously unnamed executives of the Unisys Corp. who allegedly conspired to pay Defense Department officials for privileged information.

The documents focus on a Unisys operation in Eagan, Minn., where executives are alleged to have paid defense consultants to gather confidential details about a $100-million Marine Corps contract.

While the government previously had indicated that Unisys’ effort to win the lucrative ATAAC communications equipment contract was a subject of the corruption probe, the decision to release new details suggests that prosecutors may have targeted those involved for the next round of criminal charges. The documents were released by the office of U.S. Atty. Henry E. Hudson in Alexandria, Va., which is coordinating the investigation.

Releasing Documents

The government, which had for the last 10 months fought to block efforts to make information about its Minnesota investigation public, has been releasing documents about elements of the investigation while preparing to file formal charges about them.

The new information, which was also unsealed in Minneapolis federal court, came eight days after the government secured the convictions of two Teledyne Electronics Inc. executives in a judgment that wrapped up the first round of prosecution efforts.

Among the 14 individuals and two corporations convicted in that stage of the probe was Jack A. Sherman, a Marine Corps official who admitted that he accepted $43,000 from consultants in return for confidential information on the ATAAC contract. Another figure convicted was consultant William L. Parkin, described as the chief conduit of the information.

The new documents revealed that Sherman, who pleaded guilty in January, had been secretly cooperating with investigators for two months.

No charges have been filed against the other principals alleged to have played a role in the scheme, including the three second-tier Unisys executives and two consultants named in the documents.

Some passages outlining alleged wrongdoing at the Minnesota office of the Pennsyvania-based corporation were deleted, indicating that portions of that investigation may be continuing. The leading prosecutor in the case, Assistant U.S. Atty. Joseph J. Aronica, declined to say whether he expected charges to be forthcoming in the near future.

But Aronica made clear that the new revelations “broaden the case beyond what was previously known publicly.”

“When we release these (documents),” Aronica said, “we’re satisfied that the investigation has proceeded to such a point that it won’t be jeopardized by these things coming out in the open.”

The documents, an affidavit and a search warrant filed last June when federal agents searched Minnesota offices of Unisys Defense Systems, alleged that company employees there had “been involved in criminal activities” with consultants Parkin, Thomas E. Muldoon and William Sanda.

It quoted Sanda as saying that Unisys employees had urged him to obtain details about their competitors’ bids on the Advanced Tactical Air Command Central project, which involved military air traffic control equipment, and about Defense Department evaluations of the various bids.

Unisys paid Sanda at least $18,000 for the service, much of which was passed on to other consultants who used it to pay sources within the Pentagon, the documents indicate. One of the consultants working with Sanda in the scheme was actually a confidential government informant, the papers show.

The government names three Unisys executives--William Geiger, Ralph Hughes and Robert Elfering--as the consultants’ contacts within the company.

None of those named could be reached for comment. A Unisys spokeswoman, Janet Hess, declined to comment on the allegations or to provide details about the employees, saying, “We have to have time to examine the documents.”

Geiger, a vice president, and Elfering, a marketing manager, are still with Unisys, sources said. Hughes, a former marketing director, has left the corporation, they said.

Another former Unisys vice president who worked in the company’s Long Island operation, Charles F. Gardner, already has pleaded guilty to charges of bribing Pentagon officials.

The company, which has not been charged with any crimes, has blamed wrongdoing on officials who came to the company from the Sperry Corp., which was acquired by the Burroughs Corp. in 1986 in a corporate merger that formed Unisys.