A U.S. grand jury here has indicted two top officials of a suburban Washington construction firm, one of whom was convicted Sunday of giving an illegal gift to a former District of Columbia judge, on charges of using at least $82,000 in company funds to pay personal debts and failing to report the money as taxable federal income.
U.S. Attorney Russell T. Baker Jr. announced today that an indictment charging John W. Lyon, president of Excavation Construction Inc. of Bladensburg, and Larry A. Campbell, general manager of the firm, was returned last Wednesday. The indictment was immediately sealed, Baker said, and released today after the conclusion of the bribery trial of former D.C. Superior Court Judge Robert H. Campbell.
Larry Campbell and the former judge, who are not related, were acquitted by a U.S. District Court jury in Washington of conspiracy, bribery and racketeering charges, but were found guilty of the lesser charge of offering and receiving an illegal gift that the government said was worth an estimated $300. The gift was the value of letting the company's workers move the then-judge's household belongings in 1975.
The indictment charged that Lyon used more than $58,000 of Excavation Construction's funds between 1974 and 1977 for personal purposes, including $16,773 to build a swimming pool at his home in fashionable Potomac, and another $11,000 to rim the pool with a flagstone patio. Lyon is also president of Parking Management Inc., Washington's largest parking garage service.
The indictment also charged that during the same period, Larry Campbell used at least $6,437 in company funds for work at his home in Lanham, plus payments of his household gas, electric, sewer and water bills.
The two men also are accused of making payments of $10,000 and $7,500 from company funds to rent rural property they used as personal hunting grounds.
Two other officials of the firm -- Robert P. Jenkins, its former assistant general manager, and Edward W. Storke, its chief financial officer -- also were indicted, on charges of aiding Lyon and Campbell in evading their personal income taxes. All four were charged with conspiring to obstruct the government's investigation of the case.
Arnold M. Weiner, Larry Campbell's attorney, said, "You can be assured that the case will be vigorously defended," but declined further comment. The other three men charged could not be reached.
Baker said convictions on the income tax evasion and conspiracy charges could bring maximum penalties of five years in prison, a fine of $10,000 or both.
Between 1974 and 1977, the indictment charged, both Lyon and Campbell failed to report their full incomes and pay federal taxes on them. During that period, Lynon reported annual income as high as $219,936 in 1976, while Campbell reported a maximum income of $82,486 in 1974.
Michael J. Travieso, an assistant U.S. attorney, conducted the two-year investigation of the case with another attorney, Stephen J. Immelt, and they were aided by Internal Revenue Service agents.
Travieso said it was a coincidence that the indictments were returned at the time the trial of Judge Campbell was under way in Washington. He said the indictments were put under wraps during jury deliberations so they would not influence the outcome of the trial.
Excavation Construction, a major Washington-area construction firm that has received millions of dollars of contracts for Metro subway and highway construction and other public projects in the Washington area, filed for voluntary reorganization under federal bankruptcy law in 1979. Its business has continued without interruption.
Jenkins, one of the company officials indicated here, was the government's key witness in the trial of Judge Campbell. But three jurors said today they acquitted the judge, Larry Campbell and the construction firm of the most serious charges because they did not find Jenkin's testimony to be credible. [See related story, Page C1.]
The new indictment accused the company and its officials of delivering false documents to the IRS in an attempt to impede the government from making its tax evasion cases against Lyon and Larry Campbell.
For example, the government charged that the $16,773 that was spent for Lyon's swimming pool was charged to work the company was doing on the Baltimore World Trade Center and the $11,000 spent on the patio was charged to work being done by another contractor on the Potomac Electric Power Co. power house at Chalk Point in southern Maryland. A $7,500 payment for renting the hunting ground was charged, the government alleged, to work for the Metro subway station on its Rhode Island station.