One of the largest minority-owned contracting firms in the Washington area and the company's four top officers were found guilty in U.S. District Court yesterday of conspiracy to defraud, tax evasion and fraud.
Automated Data Management Inc. and the four officers were accused of setting up foreign firms in Asia and Europe, using them to take phony tax deductions and, in an effort to conceal ownership of the companies, lying when applying for government security clearances and for the special program that funnels federal contracts to minority firms.
"Those who benefit from a special contract relationship with the government should not exploit that relationship to line their own pockets," said U.S. Attorney Jay B. Stephens. He said the convictions, which followed a two-month trial before Judge John Garrett Penn, "demonstrate that individuals who evade their responsibility to deal honestly and fairly with the U.S. will be held accountable."
The charges against ADM and its officials stemmed from a lengthy investigation that included a June 1988 search of company headquarters at 1920 Bladensburg Rd. NE by the Defense Criminal Investigative Service, the investigative arm of the Defense Department's Office of Inspector General. The probe grew to include the Internal Revenue Service and the Small Business Administration.
ADM was accepted into the minority set-aside program, commonly known as Section 8(a), in 1984 and received nearly $100 million from the United States under those contracts, according to trial evidence.
The company faces fines of $4.5 million.
Michelle Ashton, of Rockville, president of ADM, and David M. Dale, of Falls Church, executive vice president, each face a maximum penalty of 33 years in prison and a fine of more than $1 million.
Terence Sweeney, of Annapolis, vice president in charge of European operations, faces a maximum penalty of 18 years in prison and a fine of more than $1 million. Martin Segal, of Silver Spring, chief financial officer, faces a maximum of 13 years in prison and a fine of up to $750,000.
Sentencing is set for Oct. 22.
Attorneys for the defendants could not be reached for comment last night.