Fri, Dec 23, 2011
Feds Say Oregon Company Sold Defective Parts To Defense
Department
Counterfeit parts entering the supply chain are a growing
problem, and the US government is throwing the book at a
southern-Oregon company it claims has sold "nonconforming,
defective and counterfeit products" to the Department of Defense on
at least 392 separate occasions.
Harold Ray Bettencourt Jr., his ex-wife and three of the
couple's adult children had not-guilty pleas entered on their
behalf Tuesday by a federal judge. They and two employees of the
family's Kustom Products, Inc. face charges including conspiracy to
commit wire fraud and money laundering. The truck parts and
accessories company, based in Coos Bay, OR, is accused of accepting
payments of more than $7.5 million in exchange for parts that
didn't meet standards. The feds say the parts in question were sold
at profit margins ranging from 22 to over 3,700 percent, for use in
both ground vehicles and aircraft.
All seven of the accused remain free for now. The Eugene
Register-Guard reports the government seized almost $350,000 from
20 family bank accounts and more than a dozen boats and vehicles in
September, 2010. The Bettencourts say they are not guilty of the
charges and have challenged the seizures, claiming searches of
their homes and offices were made illegally.
The investigation started in 2008, when Army mechanics reported
defects in nuts used to secure the rotor systems to Kiowa
helicopters file photo above). The government also charges Kustom
Products won a bid to supply 200,000 clamp loops for use on C-5
transport planes by saying they'd be manufactured by Pacific
Industrial Components, Inc. of Eugene, OR, but substituted a
product made in China with numerous defects.
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