Four contractors have been indicted in Tennessee after federal prosecutors said they obtained U.S. military contracts for original equipment manufacturer parts but supplied unapproved aftermarket parts instead.
A federal grand jury in Knoxville returned a 19-count indictment June 17 against David Turner, 59, of Walkertown, North Carolina; Roger Wolfgram, 56, of Augusta, Georgia; Adam Boudet, 39, of Augusta, Georgia; and Alex Bath, 50, of Maryville, Tennessee, according to the U.S. Attorney’s Office for the Eastern District of Tennessee.
All four defendants are charged with conspiracy to commit wire fraud. Prosecutors also charged Turner and Wolfgram with money laundering.
The defendants appeared in federal court June 30 and pleaded not guilty. They were released pending trial, which is scheduled for September 8 in U.S. District Court in Knoxville.
Prosecutors Say Aftermarket Parts Were Disguised As OEM Parts
The indictment alleges that the four men conspired to obtain Defense Logistics Agency contracts to provide OEM parts to the military, including fuel injectors, turbochargers, and generators.
Instead, prosecutors said they supplied unapproved aftermarket parts while making them appear to be OEM parts.
The alleged concealment included fake labels, false documents, and altered documents, according to DOJ. Prosecutors said those records were used to hide the true source of certain parts.
Two Defendants Are Accused In A Kickback Arrangement
The indictment also alleges that Turner and Wolfgram had a kickback agreement tied to the parts sales.
Prosecutors said Turner was supposed to receive part of the profits from aftermarket parts sold at OEM prices.
The money-laundering charge against Turner and Wolfgram is tied to allegations that Wolfgram paid those kickbacks to a company Turner created. DOJ said the alleged payments were used to conceal proceeds from the fraud.
The Defendants Pleaded Not Guilty
The defendants appeared before U.S. Magistrate Judge Debra C. Poplin on June 30 and entered not guilty pleas, according to DOJ.
The trial is scheduled for September 8 before U.S. District Judge Thomas A. Varlan in Knoxville.
The charges are allegations. DOJ said every defendant is presumed innocent unless proven guilty beyond a reasonable doubt.
The Possible Penalties
If convicted of conspiracy to commit wire fraud, each defendant faces up to 20 years in prison, a fine of up to $250,000, and up to three years of supervised release.
If convicted of money laundering, Turner and Wolfgram face up to 20 years in prison, a fine of up to $500,000, and up to three years of supervised release.
The case was investigated by the Defense Criminal Investigative Service and IRS Criminal Investigation. Assistant U.S. Attorney Jeremy Dykes will represent the United States at trial.
Substituted Parts Can Create Bigger Risks Than A Bad Invoice
The case involves parts sold through military contracts, not ordinary consumer purchases. But the same basic issue can affect any buyer relying on a supplier’s paperwork: the label, invoice, or certificate has to match what is actually being delivered.
The Defense Criminal Investigative Service lists procurement and acquisition fraud among its investigative priorities, including defective, substituted, counterfeit, or substandard products that can damage government programs, supply chains, and operations.
The Defense Logistics Agency’s fraud-prevention guidance tells people to report suspected fraud, waste, abuse, or mismanagement to the DLA Office of Inspector General Hotline at 800-411-9127.
Contracting officers, buyers, subcontractors, and warehouse employees should preserve purchase orders, labels, certificates of conformance, shipping records, emails, invoices, packaging photos, serial numbers, lot numbers, and supplier communications if parts appear to be mislabeled or substituted.
Questions about the source of parts should be raised before the items are installed, resold, or accepted into inventory. Suspected procurement fraud can be reported through agency inspector general channels, the DLA hotline, or federal law enforcement when the contract involves U.S. government funds.
