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How Government Contractors Sold Overpriced Humvee Windows To The Pentagon

REUTERS/Mohamed Azakir

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Two brothers are the center of an investigation for allegedly defrauding the Department of Defense of nearly $6 million through selling overpriced windows for Humvees.

The Department of Justice is charging a total of five individuals with various counts of fraud for their roles in the scheme, and several are also being charged for tax evasion, the DOJ said in a press release.

The principle masterminds of the alleged fraud are: Thomas and John Buckner, former co-owners of defense contractor Ibis Tek LLC, which made emergency escape windows for Humvees under a 2009 contract with the Army.

The two brothers inflated the cost of parts Ibis Tek purchased to make the windows by creating a shell company to purchase parts for the window kits.

The Buckners created Alloy America, LLC, which they controlled, and used it to purchased frames from China for the windows at $20 a piece. Then, the Buckners would create “false invoices from Alloy to make it appear that Ibis Tek paid $70 per frame,” the DOJ said. The two brothers would also sell scrap metal generated by the manufacturing process, but failed to credit that money back to the Army contract. The Army lost $6,085,709 to the Buckner’s scheme, the DOJ said.

The two brothers had help in their scheme. Former Ibis Tek Chief Financial Officer Harry H. Kramer helped keep the ruse going by creating false IRS returns for the company in 2009 and 2010, amounting to $1 million in additional fraud.

A civilian employee with the Army contracting office is also being charged for his role in the scheme. Anthony Shaw, then Deputy Project Manager for the Humvee project, received a $1,055,500 bribe from the Buckners at one point, and he also filed false tax returns. Shaw also lied to investigators about his social ties to the Buckners, and traveling in a car, a boat and an airplane owned by the two alleged fraudsters.

The fifth person indicted is David Buckner, who has no relation to Thomas or John, and helped Shaw hide the $1 million bribe from IRS auditors.

Current Ibis Tek leaders emphasized Monday that the Buckner brothers have not been part of the company for years. “Our company was cleared in the related investigation which dates back to activities eight years ago,” Vince Nardy, CEO of what is now called Ibis Tek. Inc., said in a statement.

“Our new ownership and management teams have sterling reputations and we look forward to driving the new Ibis Tek, Inc. into the future,” Nardy said.

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