Feds Indict Danville's Armet Armored Vehicles on Fraud Charges - FOX 21/27 WFXR Roanoke/WWCW Lynchburg News, Weather

Feds Indict Danville's Armet Armored Vehicles on Fraud Charges

By Morgan Donnelly

10:47 p.m.

Armet Armored Vehicles Inc., which has an office out of Danville, makes armored vehicles. Back in 2006, the government contracted with them to make 32 armored gun trucks for personal security detail to protect Iraqi officials.

However, according a news release from the U.S. Attorney's office, federal prosecutors say ArmetT "falsely represented the level of protection provided by armored vehicles used by VIP convoys in Iraq."

Prosecutors also say all the money used to make the vehicles for the Department of Defense was tax payer dollars.

How much are we talking about?

The first contract was for $4,780,000 to build 24 armored trucks, requested in April 2006. Three months later, in June, the department of defense ordered eight more trucks for almost $1.6 million, according to the timeline written in the indictment.

Then on Nov. 1, 2006, "citing cash flow problems," ARMET asked for an advance of $1 million from the United States, according to the indictment.

A month later, the government sent them $825,000. Federal prosecutors say that money was not used to build the armored trucks, but went to "other business and personal expenditures," according to the indictment.

According to the indictment, ARMET was to build 32 vehicles for more than $6 million. In the end, only seven were built and delivered to the government. The government accepted six, and for that the company received just over $2 million.

What was wrong with the trucks? The indictment says they didn't pass ballistic protection standards, none could withstand the detonation of a grenade, and at least five of them didn't even have the tires requested in the contracts.

And while the indictment didn't indicate if the faulty trucks were used on the battlefield, what we do know is all of them were paid for by you - the taxpayer.

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6:25 p.m.

An indictment is only one side of the story; however, the federal government is accusing Armet Armored Vehicles, which has a facility in Danville, of shipping six faulty armored trucks to Iraq.

The trucks were supposed to be used to guard high level VIPs, according to the indictment.

Federal prosecutors also claim all six trucks Armet sent were judged by the U.S. military to be unsafe, and Armet tried to cover it up.

Danville is involved in all this because the government claims Armet billed the U.S. military for part of its more than $4.7 million contract from its Danville office.

The indictment reads that the trucks were to be used by "personal security detail teams to protect Iraqi officials," and in a "hostile and dangerous environment."

The indictment claims Armet received more than $2 million in taxpayer money, despite the fact that of the 32 trucks the U.S. military ordered, it only accepted six, and all six failed ballistic and blast protection tests.

The indictment also claims Armet falsely filled out paperwork that it inspected each of the six trucks and found them to be in compliance with the government contract.

All this happened between April of 2006 and March of 2008, according to the court records.

The paperwork says the U.S. military eventually fired Armet as a result.

A woman who answered the phone late Thursday evening at Armet's Danville hub said she was unaware of the indictments.

It's unclear in the indictments if any of the six armored trucks actually made it to the battlefield in Iraq.

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4:34 p.m.

U.S. Attorney's office news release:

A military contractor with offices in Danville, Va. and Ontario, Canada, was indicted this afternoon by a federal grand jury sitting in the United States District Court for the Western District of Virginia in Roanoke on charges that it falsely represented the level of protection provided by armored vehicles used by VIP convoys in Iraq.

The grand jury has charged Armet Armored Vehicles and its president, William R. Whyte, 67, of Ontario, Canada, with three counts of major fraud against the United States, seven counts of wire fraud and three counts of false, fictitious and fraudulent claims.

"The Department of Justice has no higher priority than protecting our national security," United States Attorney for the Western District of Virginia Timothy J. Heaphy said today. "We will work to ensure that the goods provided by contractors to the brave men and women of our military meet safety standards and contract specifications."

According to the indictment, Armet entered a $4 million contract in April 2006 to provide the Department of Defense with 24 armored vehicles for use in Iraq. In June 2006, Armet entered a second contract to deliver an additional eight armored vehicles. These trucks were to be used as security vehicles to Iraqi "VIPs" who regularly traveled by motorcade through a "hostile and dangerous environment."

Both contracts included specific requirements for the armoring of the vehicles, including that each vehicle be reinforced to a standard at which an armor-piercing bullet could not penetrate the passenger compartment and ceiling. In addition, the contracts required the undercarriage of each armored truck have mine plating protection that could withstand explosions underneath the vehicles. Finally, the contracts required the armored vehicles to have run-flat tires, plus one spare, so they could continue to operate should their tires be shot out or otherwise flattened.

Despite the requirement in the contract that the first 24 armored gun trucks be delivered by July 31, 2006, Whyte and Armet failed to ship a single vehicle by that deadline. Armet ultimately supplied seven armored vehicles after the contract deadline and was paid $ 2,019,454. Each of these vehicles was delivered with a "Material Inspection and Receiving Report" certifying it met the contract standards.

The indictment alleges that none of the armored gun trucks delivered by Armet and Whyte met the ballistic and blast protection requirements of the contracts, despite the defendant's claims that the vehicles met the standards. Armet and Whyte knew that each of the six armored gun trucks failed to meet the required standards, that they were defective and that they would not protect the officials they were intended to protect.

The investigation of the case was conducted by the Defense Criminal Investigative Service, the Special Inspector General for Iraq Reconstruction, the Department of Justice's Fraud Section and the Federal Bureau of Investigation. Criminal Chief for the Western District of Virginia Stephen Pfleger, Trial Attorney for the Department of Justice's Fraud Section Catherine Votaw, and Special Assistant United States Attorney Ramin Fatehi will prosecute the case for the United States.

A Grand Jury indictment is only a charge and not evidence of guilt. These defendants are entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.