Parents, Son Plead Guilty to Selling Faulty Parts to U.S.
Three family members have pleaded guilty in federal court to selling defective equipment to the Department of Defense for use in missiles, the F-14 Tomcat, B-1 bomber and other military systems.
Gerald Dillon, 54, Rosemarie Dillon, 48, and their son, Jeffrey Dillon, 32, pleaded guilty to scheming to defraud the government by selling substandard wire rope and casters to the government from their industrial supply business in suburban Spring Valley in 1999 and 2000.
The three also admitted hiding $1.4 million in the firm’s income from the Internal Revenue Service by filing fraudulent tax returns from 1997 to 2001, according to court documents.
Although the equipment did not cause any accidents or malfunctions, it required the grounding of aircraft when it was discovered, said Assistant U.S. Atty. George Hardy, the lead prosecutor.
The Dillons’ business, Supply Depot Inc., had sold equipment to the military since it was founded in 1995, aided by a government program to assist small and minority-owned businesses.
After the 9/11 terrorist attacks, the business also sold a line of patriotic products that included “Freedom Defended” T-shirts, American flags and hard hats with a flag design.
The wire rope sold by Supply Depot Inc. to the military was used in missile systems, helicopters, surface and amphibious vehicles, and in aircraft to connect wing flaps and rudders to the cockpit flight control systems. Aircraft using the wire rope included the B-1, F-14, B-52 and F-4 Phantom.
The casters assisted in scaffolding used to provide maintenance on the B-1 and to help move bombs and fuel tanks to and from aircraft.
“Our military relies on the honesty and integrity of its contractors to ... maintain the battle-readiness of our forces,” said U.S. Atty. Carol Lam. “Substitution of inferior products ... will not be tolerated.”
It is common for the Defense Department to require a higher standard of craftsmanship for safety purposes than products available to the civilian market. Equipment sold by the Supply Depot firm did not comply with the government standards for strength and endurance.
Each of the family members pleaded guilty to a single count of defrauding the government, with a possible maximum sentence of five years in prison and a $250,000 fine. Sentencing is set for April 19.
Gerald and Jeffrey Dillon also pleaded guilty to filing false tax returns, which carries a maximum sentence of three years in prison and a $250,000 fine. Gerald Dillon admitted he cheated the IRS of $495,925; Jeffrey Dillon, admitted to $358,434.
A second son, Gerald Dennis Dillon Jr., 30, entered into a “deferred prosecution” agreement, which sets conditions for the dropping of charges against him.
