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Investigation leads to Ladson
By Dan McCue
Staff Writer
An investigation by the U.S. Attorney’s office into a defense industry kickback scheme that led investigators to Ladson-based Force Protection Inc. will continue despite a guilty plea by a former employee, a U.S. Attorney said.
Michael Timothy Carter, a former Force Protection project engineer, admitted taking at least $101,500 in illegal kickbacks from a company that supplies chassis to the Ladson-based armored vehicle manufacturer.
U.S. Attorney Winston D. Holliday declined to elaborate further about the investigation, or on whether he believed other individuals at the Ladson-based armored vehicle manufacturer were involved in the kickback scheme.
Among the other federal entities involved in the investigation are the U.S. Army Criminal Investigative Division, the U.S. Navy’s Criminal Investigative Service, and the Defense Criminal Investigative Service.
According to the plea agreement, which was certified by U.S. District Judge David Norton on Jan. 24, Carter admitted to taking $1,500 from Spartan Chassis of Charlotte, Mich., each time the military vehicle manufacturer bought one of Spartan’s vehicle frames.
Carter was employed by Force Protection from June 2004 to May 2005, apparently while still serving as an independent contractor for Spartan, a leading developer and manufacturer of custom chassis for recreational vehicles, fire trucks and specialty vehicles.
Over the life of Carter’s career at Force Protection, the company bought 136 chassis from Spartan. The heavy-duty frames were then used in Cougar and Buffalo vehicles deployed in Iraq and Afghanistan.
Under the terms of the plea agreement, Carter faces up to 10 years in prison, a $250,000 fine, three years of supervised release and other penalties. Carter will likely be sentenced in 60 to 90 days, Holliday said.
According to documents filed with the U.S. District Court in Charleston last November, Carter’s had an agreement with Spartan that he would receive $1,500 for every vehicle he arranged to be sold to a number of unidentified businesses prior to his employment by Force Protection.
Once at Force Protection, he promoted Spartan to his superiors through written reports, verbal recommendations and by arranging meetings between officials of both companies.
It was during one of these meetings, in early 2005, that representatives of Spartan revealed to Force Protection that Carter was receiving payments for every chassis sold.
In a written statement, officials with Spartan Chassis said they did not initially know that Carter was working directly for Force Protection, and that when they subsequently learned of his employment relationship with the company, requested that he disclose his relationship with Spartan Chassis to Force Protection.
Tommy Pruitt, a spokesman for Force Protection, said Carter’s relationship with Spartan while in Force Protection’s employ was a clear violation of company policy.
Force Protection said in a written statement that it launched an internal inquiry as soon as it learned Carter was receiving improper compensation from a supplier, and notified and cooperated with authorities “to investigate and deal with the situation.
“The company separated the employee immediately, and the matter was handed over to the proper authorities,” the statement said.
That occurred in May 2005. A month later, Carter submitted 13 invoices to Spartan, seeking commissions on chassis Force Protection bought before he left the
company.
The total of those invoices was $19,500, court records show. This was not the total amount Carter said he was owed, the court documents said.
In September 2005, Carter entered into a consulting agreement with Spartan for professional services related to “ballistic and mine-protected vehicles,” court records show. The term of the agreement was for four months, and Carter was to receive $20,500 from Spartan per month.
According to the U.S. Attorney’s office, the fee was ostensibly for consulting services, but in reality was compensation for Force Protection’s past purchases.
Carter’s last attempt to solicit a kickback from an unidentified military contractor came on Oct. 28, 2005, when he attempted to solicit $20,500 in relation to a subcontract, court documents said.
Carter’s attorney, Dale Thomas Cobb of North Charleston, could not be reached for comment.
Pruitt said since 2005, Force Protection has continued its relationship with Spartan “to speed delivery of the vehicles to the customer. Spartan remains an important partner in the mission to deliver our vehicles.
“With the announcement of the plea agreement by the former employee, we consider this matter closed,” he said. “I don’t know of any other investigations that Force Protection is involved in regarding this matter.”
Dan McCue is a staff writer for the Business Journal. E-mail him at dmccue@setcommedia.com.
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