Fraud charges ‘shock’ armoured car firm
William Whyte once boasted in an interview with a Toronto newspaper that his armour-plated vehicles were “pretty awesome machines” and that his customers included a good friend of Arnold Schwarzenegger.
But when the Canadian man entered into a multi-million-dollar contract to supply the U.S. Defense Department with 32 armoured gun trucks to protect VIPS in Iraq, he only delivered seven — and none of them met the bullet- and blastprotecting requirements, according to a federal grand jury indictment handed down this week in Virginia.
Federal prosecutors announced Thursday that Mr. Whyte, 67, president of Ontariobased Armet Armored Vehicles, and his company have been charged with three counts of fraud against the United States, seven counts of wire fraud and three counts of false, fictitious and fraudulent claims.
The charges have not been proven in court and in a statement emailed to Postmedia News, Mr. Whyte, who is not in custody, said he was “shocked at the allegations against me, which I totally deny.” He also said he was prepared to meet with U.S. prosecutors. John Lichtenstein, Mr. Whyte’s lawyer in Roanoke, Va., said Friday he could not comment.
Armet, based in King City, Ont., has been armouring vehicles for more than 30 years and has manufacturing sites in Bradford, Ont., Danville, Va., and Tangiers, Morocco, according to a detailed company profile on Industry Canada’s website, which was updated in late 2011.
The company has an “impeccable worldwide standing” and counts as its clients heads of state, diplomats, government agencies, multinational corporations, police forces and “discriminating individuals worldwide,” the profile states. Its government clients include departments in Canada, the U.S., United Arab Emirates, Europe and Russia.
Officials with Public Works and Government Services Canada said Friday they were searching to see what, if any, contracts the government may have had with Armet.
According to the indictment, the U.S. Joint Contracting Command in Baghdad awarded Armet a $4.7-million contract in April 2006 for 24 armoured gun trucks.
A few months later, a $1.5million contract was awarded to Armet to build eight more trucks.
The vehicles were to be used to transport Iraqi VIPs through “hostile and dangerous” environments.
According to the indictment, the first 24 vehicles were to be delivered by July 31, 2006, but Armet failed to meet the deadline. By October 2006, only four trucks had been delivered.
The following month, Armet, citing cash-flow problems, sought an advance payment of $1-million, the indictment says. The U.S. military agreed to pay the company $824,531.
But instead of using that money to build more trucks, the money was diverted for “other business and personal expenditures,” the indictment alleges.
By early 2008, the company had delivered a total of seven vehicles, six of which were accepted by the U.S. military. There were other problems. The contracts required that the vehicles be bulletproof and that their undercarriages be able to withstand explosions. Armet had promised that the floors of the vehicles could withstand various assaults, including blasts from two U.S. M67 anti-personnel grenades.
But none of the trucks delivered met the required specifications, according to the indictment.
The vehicles were also supposed to be equipped with special tires that could withstand punctures. The first five vehicles did not have such tires.
“[The defendants] knew that all of the armoured gun trucks they had provided were defective and would not protect the officials that they were intended to protect,” the indictment states.
The U.S. military ended its contracts with Armet in March 2008.