How two phony Wyoming corporations duped the Pentagon
Wyoming house big enough to house 2000 corporations?
Two companies incorporated at a little house in Cheyenne, Wyoming, won Pentagon contracts after their owner took advantage of the state’s liberal incorporation laws to create the firms using an alias, and then represented them as minority-owned to win favorable treatment as a military supplier. The firms and their owner were later banned from doing business with the Pentagon for providing knock-off parts.
A Reuters investigation has found that more than 2,000 companies are registered at 2710 Thomes Avenue in Cheyenne, the headquarters for Wyoming Corporate Services, a business incorporation company that specializes in corporate anonymity.
Among the firms incorporated there is a small subset that make their money from government contracts.
A Reuters review of federal contracting databases found nine firms registered at 2710 Thomes Avenue have been awarded 93 contracts worth more than $1.6 million by a half dozen government agencies, including the U.S. Department of Defense, the U.S. Treasury’s Internal Revenue Service, the Centers for Disease Control, and the Department of Veterans Affairs.
More than 90 percent of the contracts were awarded by the Department of Defense…
In January, the Defense Logistics Agency (DLA) banned Eagle Logistic Solutions and Eagle Logistics Aerospace from selling components to the Pentagon for three years. The ban came after investigators found the firms, and their owners, had knowingly supplied air and fluid-filtering kits for military tractor-trailers between 2001 and 2005 that were reverse-engineered in Turkey to look like they were made by Parker Hannifin, the required manufacturer…
The companies were created by Atilla C. Kan, an employee of another Pentagon supplier called New York Machinery. DLA records, Wyoming incorporation data, and documents submitted by an attorney for New York Machinery in a settlement agreement in a separate federal criminal lawsuit show Kan formed the companies in Wyoming under the name John Ryan. He later used the alias, and a description of the companies as “minority-owned,” “woman-owned” and “Hispanic-owned,” when applying to supply military parts, the documents show.
A Pentagon memo detailing the proposed ban on Eagle Logistics Solutions and a sister company, Eagle Logistics Aerospace, says the company won four contracts worth $53,923 in which it supplied knock-off parts. But the Reuters review of the Federal Procurement Data System, a federal contracts database, shows the companies got even more business, netting orders for 44 parts contracts worth more than $715,000…
Gerald Pitts, the president of Wyoming Corporate Services, declined to comment on specific clients.
In January 2007, Kan pleaded guilty to one count of wire fraud in New Jersey federal court as part of two criminal cases related to the scheme to supply fake parts, which included his former employer New York Machinery. The company pleaded guilty to one count of wire fraud last December.
Corporate scams like this are perfectly acceptable to Congress, Wall Street, DC bureaucrats and our bought-and-paid-for politicians. Low bid contracts aren’t necessarily any better than no bid contracts. Procedures initiated to enhance minority businesses have been bent into instruments of fraud practically from their inception – and the government agencies authorized to investigate and prosecute these frauds would rather spend their time doing almost anything but challenging America’s corporate royalty, the lords and ladies who own the electoral wallets and pocketbooks.
BTW – I wandered through LinkedIn and Gerald Pitts – president of Wyoming Corporate Services – has almost 40 corporate entities that he’s associated with in Cheyenne. Lovely little town, Cheyenne. Even though they’re challenging the Cayman Islands for the number of sleazy businesses they house.