After working as a salesman for an office supply company, John P. Walsh struck out on his own in late 1977. But for the next three years, according to a federal prosecutor, most of his business was corrupt: With the connivance of a government procurement officer, Walsh sold supplies to the Interstate Commerce Commission at greatly inflated prices.
On Friday, Walsh, 38, of Cabin John, was sentenced to 13 months in prison for his part in the scheme that Assistant U.S. Attorney David F. Geneson said cost the federal government more than $255,000 in excess charges.
Walsh was also fined $15,000 by U.S. District Court Judge John Garrett Penn and was ordered to pay $26,375 in restitution.
The other defendant in the case, Donald Martin, 42, of Camp Springs, a former Interstate Commerce Commission procurement agent, is scheduled to appear before Penn for sentencing tomorrow.
Both men were accused of fraud and conspiracy in a 26-count indictment by a federal grand jury in the District last year. In plea bargains in July, Martin pleaded guilty to one count of assisting in a false claim against the government, a felony, while Walsh pleaded guilty to 10 misdemeanors -- five counts of supplementing the salary of a government employe and five counts of theft of public property under $100.
In a memorandum presented to the court, Geneson said Walsh paid Martin between $12,000 and $16,000 in connection with more than 70 fraudulent purchase orders for supplies such as paper, envelopes, folders and labels.
Geneson said the scheme involved 10 different "shell" companies controlled by Walsh and six fake names that were actually Walsh.
In 1981, Geneson said, Martin arranged for Walsh to remove file folders from the ICC as salvage and then sell them back to the agency for more than $26,000. In many other cases, Walsh charged the agency for more than he delivered by reducing the amount of paper placed in the boxes he supplied.
On Friday, Walsh told Penn he was remorseful. His lawyer, W. Gary Kohlman, said Walsh is bankrupt and called his illegal actions an "aberration."
But Penn noted that Walsh had been convicted 19 times for traffic violations since 1968, including reckless driving and driving under the influence of alcohol. In 1983, Penn said, Walsh was convicted of firing a shotgun into the window of a store in Bethesda after its owner had his car towed away because it was parked illegally.
"Your past record is not unblemished," Penn said. ". . . You have contributed to the corruption of the procurement process of the government . . . . We cannot tolerate people who corrupt."