Brothers Sentenced to Prison for Defrauding U.S. Department of Defense

https://www.justice.gov/usao-wdpa/pr/brothers-sentenced-prison-defrauding-us-department-defense

Department of Justice
U.S. Attorney’s Office
Western District of Pennsylvania

FOR IMMEDIATE RELEASE
Tuesday, October 10, 2017

Brothers Sentenced to Prison for Defrauding U.S. Department of Defense

PITTSBURGH – Thomas G. Buckner, 66, of Gibsonia, Pa., and his brother, John. P. Buckner of Lyndora, Pa., have been sentenced in federal court to 30 months incarceration and a $500,000 fine, and 24 months incarceration and a $300,000 fine, respectively, on charges of major fraud against the U.S. Department of Defense and income tax evasion violations, United States Attorney Soo C. Song announced today.

According to the information presented to the court, the Buckner brothers were 50/50 owners of Ibis Tek, LLC. Ibis Tek’s main office was located at 912 Pittsburgh Street, in Butler, Pennsylvania, and it had an office at Ibis Tek Victory Road facility, 220 South Noah Drive, in Saxonburg, Pennsylvania. Ibis Tek manufactured both military and commercial products but specialized in the development of transparent armor and accessory products for tactical and military combat vehicles. Ibis Tek itself was not charged with any violations.

TACOM, located in Warren, Michigan, was responsible for letting and overseeing contracts on behalf of the U.S. Department of Defense, including contracts concerning High Mobility Multipurpose Wheeled Vehicle (Humvees). Ibis Tek had a subcontract to produce Vehicle Emergency Escape Window (VEE Window) Kits for Humvees. The Buckners inflated Ibis Tek’s costs to manufacture the VEE Window kits by creating Alloy America, LLC, (Alloy) a company that was co-located at Ibis Tek that the Buckners controlled, by using Alloy to purchase the frames in China for $20 per frame, and by using false invoices from Alloy to make it appear that Ibis Tek paid $70 per frame. In addition, the Buckners sold scrap aluminum collected in the manufacturing process but failed to credit that money to TACOM. The losses to TACOM were $6,085,709.

The income tax evasion charges against the Buckner brothers arose from not reporting the cash from sales of scrap aluminum, and for taking unallowable business deductions described below. Thomas Buckner repaid the I.R.S. more than $940,000 in restitution, penalties and interest; John Buckner repaid more than $980,000 in restitution, penalties and interest.

The contract fraud violations described above formed the basis for False Claims Act charges against the Buckner brothers brought by the Affirmative Civil Enforcement (ACE) Unit of the U.S. Attorney’s Office. Attorneys on both sides agreed on a civil settlement of $12,171,580.00. On Friday, October 6, 2017, the Buckner brothers made the final payment to the Department of the Treasury on their civil settlement.
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