Brothers accused of defrauding Army on Humvee contract

The owners of Ibis Tek, a U.S. Defense Department contractor in Butler County, and the company’s chief financial officer were charged Friday with defrauding the Army on window contracts for Humvees in addition to income tax evasion.

In a related case, a former Army civilian employee in charge of Humvee contracts in Michigan was charged with demanding and accepting more than $1 million in illegal gratuities from the Ibis owners, brothers Thomas and John Buckner.

Thomas Buckner, 65, of Gibsonia, and John, 67, of Lyndora in Butler Township, are charged with major fraud against the U.S. in ripping off the U.S. Army Tank-Automotive and Armaments Command

in Michigan.

Ibis specializes in making transparent armor and accessories for military vehicles and had several multimillion-dollar contracts with the tank-automotive command to produce emergency escape window kits for Humvees.

Federal prosecutors said the Buckners inflated Ibis Tek’s costs to make the kits by creating a separate company, Alloy America, and using it to buy window frames in China for $20 a frame but filing fake invoices from Alloy to make it appear that Ibis Tek paid $70 a frame.

Prosecutors also said the Buckners sold scrap aluminum collected in the manufacturing process but did not credit the money to the tank-automotive command as required under rules governing military contracts.

The U.S. Attorney’s office set the total losses to the Army in the schemes at more than $6 million. Prosecutors said the safety of the products was never at issue.

In addition to the alleged fraud, the Buckners were charged with income tax evasion for 2009 and 2010 in not reporting income from the cash sales of the scrap aluminum and for declaring illegal business deductions for the gratuities they paid Anthony Shaw, of Rochester, Mich., the Army civilian overseeing the Humvee contract. John Buckner made more than $8 million in 2009 and $6 million in 2010. Thomas Buckner made about $8 million each of those years.

Prosecutors said Mr. Shaw, 55, the deputy project manager at the tank-automotive command, demanded and received $1,055,000 in wire transfers and checks from the Buckners through David Buckner of Warren, Mich., who owned a motorcycle shop. Mr. Shaw is charged with accepting illegal gratuities from the Buckners.

David Buckner is no relation to the Buckners in Pennsylvania.

Mr. Shaw is also accused of tax evasion in not reporting the payments and lying to authorities by saying he had never socialized with the Buckners during a motorcycle trip to Pennsylvania or on other trips he made with them on their plane, in their cars or on a boat.

In addition to the Buckners, the Ibis Tek CFO, Harry H. Kramer, 52, of the Wexford area, is accused of fraud for his role in the scheme at Ibis as well as filing false tax returns for the company for 2009 and 2010.

David Buckner is accused of impeding the IRS by acting as an intermediary for gratuity payments between the Buckners and Mr. Shaw in an effort to hide the source of the payments.

No lawyers were listed for any of the defendants. Ibis Tek said it would have no comment on the case.

Ibis Tek had multiple contracts either directly with the tank-automotive command or subcontracts through British Aerospace Electronic Systems, a prime contractor, including three contracts for Humvee window kits worth more than $60 million combined.