Posted by Isabelle Roddy.
Two brothers, Thomas and John Buckner, founded a defense contractor in Pittsburgh, PA, known as Ibis Tek LLC, specializing in the expansion and improvement of transparent armor and miscellaneous gadgets for warfare vehicles. Specifically, Ibis Tek supplies and provides the United States Department of Defense with transparent armor, advanced lighting, and tactical vehicles and accessories. The founding brothers sold the company to new investors in February 2017.
While operating the company, the brothers executed numerous illicit activities, particularly through the “Michigan-based U.S. Army Tank-Automotive and Armaments Command or TACOM” (Mandak). They swindled TACOM by employing a cheaper Chinese firm to construct emergency window kit frames for only $20 and then selling them to TACOM for $60, thereby making a $40 profit on each frame. Additionally, the brothers “sold scrap aluminum relating to the manufacture of the frames” but retained the earnings (Mandak). Consequently, the individuals executed a “$6 million scheme to overcharge the U.S. Defense Department” (Mandak).
As a result, in May 2017, the brothers plead guilty “to charges of major fraud against the government and income tax evasion for filing returns that did not include the illegal income” (Mandak). The individuals were incarcerated and received monetary fines. Precisely, Thomas Buckner received a two and a half year sentence and a fine of $500,000. On the other hand, John Buckner only incurred a two-year sentence and a fine of $300,000. Thomas received the more severe penalty due to his day-to-day involvement in the company, prominently after retiring from the company’s management in 2007 (Mandak). Nevertheless, the brothers “have already repaid $6 million to the government, plus another $6 million to settle a lawsuit the government filed against them for the scheme,” and nearly $2 million in income tax losses and interest (Mandak). However, legal officials do not believe money damages are a sufficient form of punishment for the two given their affluence. Instead, they must provide more than mere monetary compensations.
Finally, the previous chief financial officer of the company, Harry Kramer, was charged as well due to his assistance in “filing false tax returns that understated Ibis Tek’s income in 2009 and 2010” (Mandak). He will be sentenced on October 18.
Isabelle is a marketing and finance major at the Stillman School of Business, Seton Hall University, Class of 2020.
Source:
http://news.findlaw.com/apnews/34ae2fdc684b45188d9bb4907ad66a8a