Defense contractor sentenced to 5 years probation in federal fraud case

Defense contractor gets probation in fraud case

PENSACOLA, Fla. — A defense contractor facing up to 15 years in prison for accepting a $200,000 kickback got five years of probation Tuesday after a judge applauded his work with federal agents investigating problems with the Congressional earmark process.

Richard S. Ianieri, who pleaded guilty in July, told U.S. District Judge Lacey Collier he hopes to “make amends” for his actions.

“I made a terrible mistake and that weighs on me everyday,” Ianieri said.

Collier also ordered Ianieri to pay a $200,000 fine within 90 days and to continue cooperating with the government in its investigation of the earmark process.

Ianieri was the former chief executive of Coherent Systems International Corp., a Pennsylvania-based defense contractor with ties to Rep. John Murtha, D-Pa., the former chairman of the powerful House Appropriations Subcommittee on Defense. Murtha, who was never charged with criminal wrongdoing in the investigation, died Feb. 8 following complications from gallbladder surgery.

The subcontractor accused of paying the $200,000 kickbacks to Ianieri was Kuchera Defense Systems Inc., of Windber, Pa.

Ianieri steered $650,000 worth of work to Kuchera from an $8.2 million congressional earmark in return for the payoff and testified in July “there was political and earmark pressure” to do so, though he didn’t say who from.

The firm Ianieri founded, Coherent Systems International, got the earmark after hiring a lobbying firm that employed the Murtha’s brother.

Ianieri’s sentencing on Tuesday also settled his guilty plea to fraud on a research contract at the Florida Panhandle’s Eglin Air Force Base. That charge also involved subcontractors paid from the earmark money.

Ianieri testified against a retired Air Force lieutenant colonel who ran a small Florida defense contracting company and was convicted and sentenced to 18 months in prison for destroying records and lying to a grand jury. Another retired Air Force lieutenant colonel who worked at the research lab on Eglin Air Force Base pleaded guilty to making false statements and conflict of interest and was sentenced to six months in prison after he was accused of steering lab work to specific contractors.

Assistant U.S. Attorney Stephen Preisser said the case shows that the Congressional earmark system is flawed.

Ianieri was paid the $8.2 million through a Congressional earmark to develop a battlefield communication system. But Preisser suggested Ianieri would have developed the system for whatever amount was appropriated.

“It would have been built it for whatever it (the earmark) was, it just happened to be $8.2 million,” he said. “It was a backward process, there was no cost analysis to justify the cost expenditure.”

Instead, Preisser said the taxpayers paid more because of a system that benefited a string of people who had relationships in specific congressional districts.

Thomas Dillard, Ianieri’s attorney, said that his client will continue to cooperate with any investigations. But Dillard said he could not give specific details about any ongoing investigations.