Eight more General Services Administration supply store managers and a supervisor in charge of 11 of the stores were indicted by a federal grand jury in Baltimore yesterday on charges of defrauding the government.
The supervisor and managers of the GSA stores, which provide office supplies for workers in federal agencies, were accused of taking bribes from office supply firms in return for certifying that they received from the firms goods that in fact were never delivered.
With yesterday's indictments, a total of 30 federal employes and private contractors have been indicted in the two major federal investigations of GSA corruption being carried out by prosecutors and grand juries in Baltimore and Washington. Already, 20 of the defendants have pleaded guilty to defrauding the government.
The grand jury in Baltimore has now indicted managers of half of the 30 GSA office supply stores in the five-state Washington, D.C., region. The stores, located in large federal buildings, are self-service stationery supermarkets in which employes of federal agencies pick out the supplies their offices need and pay for them with interagency credit cards.
Yesterday's indictments, announced by Russell T. Baker Jr., U.S. attorney for Maryland, also contained a message to other GSA employes still under investigation. The Baltimore grand jury, supervised by federal prosecutors Daniel M. Clements and Elizabeth H. Trimble, brought a "superseding" indictment against former GSA supply store manager Charles E. Phelps, 39, of Upper Marlboro.
Phelps was one of 18 persons indicted by the grand jury on Sept. 29, each on one count of defrauding the government. All but Phelps quickly pleaded guilty to the charge and agreed to cooperate with the prosecutors in their continuing probe of GSA. In return, they were each promised a lenient sentence.
Phelps refused to plead guilty, however, and in the new indictment he is charged with 14 counts of bribery, conspiracy to defraud the government and filing false claims with the government. Phelps had been manager of the GSA supply store in GSA's regional office at Seventh and D Streets SW.
Phelps is accused of taking airline tickets, television sets, radios, calculators and other bribes from James Hilles Associates Inc., a Maryland office supply distributor. In return, according to the new indictment, Phelps certified that his store had received paper clips, pas, paper, report covers, binders, file filders and glue from Hilles, even though the items were never delivered.
The Hilles firm was then paid by GSA for the items it never supplied. Some of this money was used to bribe the GSA store managers, according to sources. The president and former vice president of Hilles have pleaded guilty to defrauding the government and are now cooperating with the prosecutors.
The supervisor of GSA supply stores indicted yesterday is Hugh S. Smith, 42, of Alexandria, the highest-level GSA employe indicted so far. Smith, charges with 16 counts of bribery and other offenses, was accused of receiving a stereo set, cassette recorder, a television set, other small appliances, furniture and carpeting from the Hilles firm.
The grand jury also indicted Frank N. Ellis, 34, of Falls Church, on 16 counts of bribery and other offenses. Ellis, who had been manager of the GSA supply store at the George H. Fallon federal office building in Baltimore, was the first store manager to be implicated in the Baltimore investigation.
A former girlfriend of Ellis notified GSA that he had allegedly received tires and other gifts from companies [WORDS ILLEGIBLE] investigators looked into it and turned the case over to the FBI.
Since that time more than a year ago the Baltimore prosecutors have continued to use both GSA and FBI agents in their GSA probe.
The others indicted yesterday:
David A. Sible, 35, of Gaithersburg, who was manager of the GSA store at the Parklawn Building in Rockville.
Ollie V. Smith, 40, of Omon Hill, who is manager of the GSA store at the Transpoint Building in Washington and had been manager of the store at GSA headquarters here.
John B. Swindler, 36, of Upper Marlboro, who is manager of the GSA store at the Lafayette Building in Washington.
Alton C. Beamon, 28, of Glen Burnie, who is an assistant manager of the GSA store in the Fallon Building in Baltimore.
Doretha R. Blackwell, 42, of Baltimore, who is an assistant manager at the Fallon building store.
Joel E. Quarles, 33, of Baltimore, an assistant manager of the Fallon building store.