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Kuchera brothers sentenced in federal court; Avoid jail time
Dozens come to court to show support for the men
Written By: Marc Stempka
Reported By: Maria Miller
JOHNSTOWN, Pa. -- Amid several supporters, two Cambria County brothers have been sentenced in federal court for government fraud and conspiracy charges related to their defense contracting business.
William Kuchera, 58, of Summerhill, and Ronald Kuchera, 51, of Johnstown, were sentenced Tuesday by United States District Judge Kim Gibson to pay millions of dollars in restitution, but both avoided jail time for their crimes.
Both pleaded guilty earlier this year to one count each of major fraud against the government and conspiracy.
William and Ronald Kuchera were both sentenced to five years of probation, which includes 18 months home detention with electronic monitoring, 1,000 hours of community services and other restrictions regarding drugs and firearms. Both were also ordered to pay $500,000 each in fines.
William was ordered to repay the Department of Defense $823,566, the IRS $257,168, and forfeit $450,000, all of which he has completed.
Ronald was ordered to repay the Department of Defense $950,000, the IRS $121,313, and forfeit $450,000, all of which he has completed.
Federal sentencing guidelines included 30 to 37 months in the federal prison for each, but Judge Gibson took into account the restitution that has been paid, family concerns, community service and other items, to come to her sentence of probation, fines and monitoring without jail time.
The Kucheras defense attorneys said that probation was not a gift.
Dozens of people packed the federal courtroom in downtown Johnstown, many of them there to show their support for the Kuchera brothers.
The Kuchera brothers owned and managed Kuchera Defense Systems, Inc., (KDS), a contractor for the United States Department of Defense. The company was based in Windber, Somerset County.
Federal prosecutors said KDS submitted cost certifications to the government with expenses that were not permitted and resulted in the inflation of costs for overhead and general and administrative expenses.
Prosecutors said the brothers submitted a false invoice for $650,000 to Coherent Systems International, Inc., a defense contractor owned by Richard Ianieri. The invoice sought payment for a component that had never been manufactured or delivered to Coherent.
Coherent was awarded an $8 million contract for the Ground Mobile Gateway Systems, a prototype for an unmanned vehicle that was designed to prevent friendly-fire incidents. After receiving the $650,000 payment from Coherent, the Kuchera brothers kicked back approximately $200,000 to Ianieri, prosecutors said.
Additionally, prosecutors said each of the Kuchera brothers filed false income tax returns for themselves and KDS. The personal tax returns were deemed false because they failed to disclose income related to certain personal expenses paid by their companies. The KDS returns were deemed false because they included person business expense deductions that were personal expenditures of the brothers.
Some of the expenses included the leasing of a private airplane, vacations to Jamaica, personal car leases, improvements to a private residence and lobbying fees, prosecutors said.
In July 2009, Ianieri pleaded guilty to a one-count indictment for soliciting kickbacks and filing false purchase orders related to an Air Force contract. In February 2010, he was sentenced to five years of probation and ordered to pay a $200,000 fine, prosecutors said.
In the months leading up to their sentencing, the Kuchera brothers staged a letter-writing campaign to former employees, asking them to write to federal officials to seek leniency at their sentencing.