HUNTSVILLE, Ala. – A federal judge sentenced a Lieutenant Colonel in the U.S. Army Reserves to four years in prison and ordered him to forfeit $4.4 million to the government for fraudulently supplying hundreds of thousands of Chinese-produced baseball caps and backpacks to the Army Recruiting Command and passing them off as American-made products.
U.S. Attorney Jay E. Town, Defense Criminal Investigative Service Special Agent in Charge John F. Khin, and U.S. Army Criminal Investigation Command Special Agent in Charge James T. Wallis announced the sentence.
Frederick Lamar Burnett, 50, of Madison, received millions of dollars under contracts with the Army stating he must supply promotional items for the Recruiting Command that were “100 % U.S. MADE.”
A federal jury convicted Burnett in April on three counts of wire fraud for using his Huntsville-based company, Lamar International Inc., in the scheme to defraud the Defense Department on three contracts, worth $6.2 million, between 2005 and 2009. U.S. District Judge Sharon L. Blackburn sentenced Burnett and ordered him to serve three years of supervised release following his prison term.
“Securing the defense procurement base from fraud is important to American taxpayers and our national security posture,” Town said.
“In concert with our partner agencies, DCIS aggressively investigates fraud and corruption that undermines the integrity of Department of Defense programs and contracts,” Khin said.
Burnett had received two contracts for baseball caps and one for backpacks, all intended as promotional items to give Army recruits. Burnett certified that he would meet the requirements of the Buy American Act, the Berry Amendment, and federal regulations that require the government to buy domestic products and materials, according to court evidence at trial.
The Buy American Act requires the federal government to buy domestic articles, materials and supplies, primarily to protect American workers and manufacturing jobs.
The Berry Amendment prohibits the Defense Department from buying clothing, fabrics, fibers and yarns that were not grown, reprocessed, reused or produced in the United States. The purpose of the Berry Amendment is to protect the viability of the American textile and clothing production base.
Under the first contract awarded to Lamar International in 2005, Burnett supplied 209,706 baseball caps over three years and the government paid him $1.4 million.
Under the second contract, awarded in 2007, Lamar supplied 590,042 ball caps and the government paid him about $4 million.
Under the third contract, also awarded in 2007, Lamar supplied 146,375 Army Combat Uniform backpacks and the government paid $1.1 million. A Defense Department accounting agency made the payments to Burnett by electronic funds transfer to his Huntsville bank.
Along with the required compliance to the Buy American Act and the Berry Amendment, according to evidence, both of the 2007 contracts included a statement, in all capital letters, that the “PRODUCT MUST BE 100% U.S. MADE.”
Instead of providing American-made products, however, Burnett negotiated and contracted with suppliers directly from China and with American companies who he knew were procuring their products from Chinese manufacturers. He filled orders with Chinese-made products under all three contracts and hid their foreign origins by hiring workers on a cash basis to remove the Chinese labels and repackage the items, which he then sent to the Army Recruiting Command.
DCIS and Army CID investigated the case, which Assistant U.S. Attorneys David H. Estes and Jonathan S. Keim prosecuted the case.