Global Fastener News

Fastener Distributor Sentenced for Defrauding Defense Department Small Business Program

John Wolz

A Texas businessman operating a fastener distributorship out of Colorado was sentenced to 23 months in federal prison for cheating the Department of Defense out of more than $160,000 in dozens of orders for nuts, bolts and other items.
Greig Placette of American Material Resources also must pay $160,307 to the Defense Department.

Placette, 56, of Katy, Texas, was indicted by a federal grand jury in Denver on February 17, 2005, on charges of mail and wire fraud for a scheme to defraud the Department of Defense.
According to the indictment, Placette was president and owner of American Material Resources, operated out of Ouray, Colorado, but frequently directed activities from Texas. AMR brokered industrial supplies ranging from nuts and bolts to heavy equipment.

In early 1999 Placette applied and was accepted by the Department of Defense to participate in a small business preference program.
The preference program was used by the government as a means of simplifying and expediting the process by which it purchased supplies in orders of $2,500 or less, eliminating the need for the DOD to negotiate the terms of each purchase.
Rather than obtaining bids for low-cost items, the DOD issued calls for orders of not more than $2,500 on a rotating basis to each participant in the program. Although each call was non-competitive, each participating contractor, such as AMR, was limited by the terms of the program”s agreement.

Placette was charged with sending numerous invoices to be sent to the DOD which falsely reflected that the goods had been shipped on the date invoiced. “In fact, and as the defendant well knew, AMR usually ordered the supplies from its vendors only after it had invoiced the Department of Defense, contrary to the program”s guidelines,” according to a statement by Bill Leone, acting U.S. attorney for Colorado and Steven O”Neill, agent for the Department of Defense”s inspector general. “The supplies had not yet been shipped by AMR because they had not yet been purchased by AMR. �2005 FastenerNews.com