Guilty Pleas Entered in Plane Parts Scandal
An Orange County consultant was charged with conspiracy and officials at two Los Angeles area companies were implicated in a scheme that resulted in the placement of counterfeit parts inside military and commercial planes, according to court documents filed Wednesday in Seattle.
The scheme was outlined in federal court as Bruce J. Rice, president of Rice Aircraft Inc of Hauppauge, N.Y., pleaded guilty to one count of conspiracy and two counts of mail fraud. The firm pleaded guilty to one count each of conspiracy and mail fraud.
For the record:
12:00 a.m. Aug. 18, 1989 FOR THE RECORD
Los Angeles Times Friday August 18, 1989 Home Edition Business Part 4 Page 2 Column 3 Financial Desk 1 inches; 33 words Type of Material: Correction
Parts scandal--The individuals at Hi-Shear Corp. in Torrance and Deutsch Fastener Corp. in Lakewood who allegedly took kickbacks in a parts counterfeiting scheme as described in an Aug. 17 article do not currently work for those firms.
Assistant U.S. Atty. Bruce Clark said no accident had been attributed to the parts, which were rivets and other fasteners sold between 1977 and 1988.
One way Rice Aircraft was able to sell its used parts was through a kickback scheme, according to court documents. The company allegedly paid employees of competitors to get advance looks at their bids on important projects. Rice Aircraft would take that information and underbid rival firms to win significant contracts.
Kickbacks Charged
Richard K. Ohlman, a Mission Viejo parts broker, was charged Wednesday for allegedly conspiring in 1982 with Rice and Rice Aircraft to pay kickbacks to employees of Boeing Co.
Officials at Hi-Shear Corp. in Torrance and Deutsch Fastener Corp. in Lakewood--both parts makers--allegedly accepted kickbacks from Rice, according to the U.S. Attorney’s office.
Ohlman, 70, declined to comment Wednesday. If convicted, he faces up to five years in jail and a $5,000 fine.
Employees at Hi-Shear and Deutsch Fastener were not charged because they had agreed to cooperate as witnesses against Rice, Clark said. He added that employees at the two firms were not acting at the direction of management. Neither company has been accused of wrongdoing.
Besides getting bid information, the employees allegedly supplied Rice Aircraft with test reports that falsely indicated the counterfeit parts had met safety specifications.
Rice Aircraft allegedly took used or damaged nuts, bolts and rivets and had them stripped and replated. It then sold the parts as new under the original manufacturer’s trademark, according to the government. Among the airlines that purchased the parts were United, American, TWA, and Pan Am.
