Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Cambria Brothers Avoid Jail in Defense Fraud Case

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Cambria Brothers Avoid Jail in Defense Fraud Case

Article excerpt

The Kuchera brothers of Cambria County, who admitted ripping off U.S. taxpayers through a kickback and conspiracy scheme at their Johnstown-area defense contracting firm, avoided prison Tuesday and received house arrest instead.

William and Ronald Kuchera, who ran Kuchera Defense Systems until they sold the company after a federal raid in 2009, pleaded guilty in April to defrauding the U.S. and had faced up to three years behind bars.

But they argued that they didn't deserve jail because their company had provided hundreds of jobs in a depressed region, they'd already paid millions in restitution and they donated time and money to food banks and dozens of charities.

U.S. District Judge Kim Gibson in Johnstown took those factors into consideration and sentenced both to five years of probation, the first 18 months on home confinement with electronic monitoring.

He also ordered each to perform 1,000 hours of community service work and pay $500,000 each in fines.

In addition, the judge ordered the men to pay a total of $2.1 million to the Defense Department and the IRS, plus forfeit $450,000 each. Lawyers for the brothers said they had completed those payments.

The Kucheras, who built a small electronics firm into one of Johnstown's major employers, admitted that they paid $199,000 in kickbacks to Richard Ianieri, part-owner of Coherent Systems International, a prime contractor that won an $8.2 million contract for a prototype device designed to prevent friendly fire incidents in combat zones.

As a subcontractor, the Kucheras submitted a fake invoice to Coherent that sought a $650,000 payment for a component that was never delivered. After Coherent paid the bill, the brothers kicked back two checks to Mr. Ianieri for $102,000 and $97,000 and kept the remaining $450,000 for themselves, according to court records from their guilty plea in April.

Had the case gone to trial, the U.S. attorney's office in Pittsburgh said it also would have proven that the Kucheras claimed the use of a private plane, lobbying costs, home improvements, a car and other personal expenses as business expenses, paid for by the government. …

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