A federal grand jury has indicted a lieutenant colonel in the U.S. Army Reserves for fraudulently supplying, as “100 % U.S. Made,” hundreds of thousands of Chinese-produced baseball caps and backpacks. The items were furnished through Department of Defense (DoD) contracts for promotional items for the Army Recruiting Command.
A three-count indictment filed in U.S. District Court charges that Frederick L. Burnett, 48, through his Alabama-based company, Lamar International Inc., schemed to defraud the DoD on three contracts, worth a total of $6.2 million, between 2005 and 2009. All the contracts were for promotional items — baseball caps and backpacks — to be given to Army recruits.
Burnett certified on all three contracts that he would meet the requirements of the Buy American Act, the Berry Amendment, and federal regulations that require the government to buy domestic products and materials, according to the indictment.
The Buy American Act (BAA) is a law requiring the federal government to buy domestic articles, materials and supplies, primarily to protect American labor. The Berry Amendment is a legal restriction that prohibits DoD from spending its funds on clothing, fabrics, fibers and yarns that are not grown, reprocessed, reused or produced in the United States. The purpose of the Berry Amendment is to protect the viability of the textile and clothing production base in the United States.
According to the indictment:
- Beginning in 2005, Burnett, through his company, supplied Army recruiters with 209,706 baseball caps over a three year period. The government paid him $1.4 million for these initial deliveries.
- Under a second contract, awarded in 2007, Lamar supplied 590,042 ball caps, and the government paid him about $4 million.
- Under the third contract, also awarded in 2007, Lamar supplied the Army with 146,375 backpacks for which he was paid $1.1 million.
In addition to the required compliance with the BAA and the Berry Amendment, both of the 2007 contracts included the requirement, in all capital letters, that the “PRODUCT MUST BE 100% U.S. MADE.”
Instead of providing American-made products however, Burnett negotiated and contracted with suppliers directly from China, along with American companies who he knew were procuring the products from China. He used Chinese-made products to fill orders under all three contracts and hid their foreign manufacture by hiring workers on a cash basis to remove all the Chinese labels and repackage the items he sent to the Army Recruiting Command, the indictment says.
After award of the second contract, a competitor protested the bid, claiming Burnett could only bid as low as he did if he were using foreign suppliers. The government allowed Burnett to proceed with the contract after he submitted documentation that he was using only American-made products and that he would comply with all aspects of the Buy American Act and the Berry Amendment, according to the indictment.
The indictment, handed down on May 25, 2016, seeks to have Burnett forfeit the total dollar value of all three contracts as proceeds of illegal activity. In addition, Burnett faces up to 20 years in prison and a $250,000 fine.
DCIS and Army CID investigated the case, which Assistant U.S. Attorney David H. Estes is prosecuting in Birmingham, Alabama.
Readers are reminded that an indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Retired Navy Captain Michael Brooks, 57, of Fairfax Station, Virginia; Commander Bobby Pitts, 47, of Chesapeake, Virginia; and Lieutenant Commander Gentry Debord, 47, who is based in Singapore, were charged on May 25, 2016, in the Southern District of California.
Brooks and Pitts made their initial appearances on May 27, 2016 in the U.S. District Court for the Eastern District of Virginia. Debord appeared in U.S. District Court for the Southern District of California. Brooks was allowed to post a $50,000 bond. Pitts was granted a $5,000 bond, ordered to be subject to electronic monitoring and to appear in the Southern District of California on June 10. Debord was granted a $40,000 bond secured by real property. Debord is scheduled to appear for a preliminary hearing before U.S. Magistrate Judge David Bartick of the Southern District of California on June 9, 2016.
The NCIS, the Department of Defense’s Defense Criminal Investigative Service (DCIS) and the Defense Contract Audit Agency (DCAA) are conducting the ongoing investigation. Assistant Chief Brian R. Young of the Department of Justice Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark W. Pletcher of the Southern District of California are prosecuting the case.
