4 Plead Guilty in Defense Industry Kickback Probe

A former vice president of Teledyne Camera Systems and three former employees of Hughes Aircraft Co. pleaded guilty Monday in Los Angeles federal court to taking kickbacks for awarding subcontracts on U.S. Defense Department projects.

Assistant U.S. Atty. Fred Heather said no deals had been made with the four men on sentencing, “other than an agreement to inform judges of the extent of their cooperation” in an FBI investigation into kickbacks in Southern California’s huge defense industry.

When charges were filed April 24 against the four defendants and six other people, U.S. Atty. Robert C. Bonner said they represented “just the tip of the iceberg” in widespread bribery among defense subcontractors.

In Monday’s court action, Richard Floyd Herbert pleaded guilty to two counts of mail fraud in connection with his taking a $2,000 kickback payment in February, 1984, while he was vice president and general manager of Teledyne Camera Systems in Arcadia.

Laundered Kickbacks

Herbert, 52, of Sepulveda told U.S. District Judge David Kenyon that the money was paid to Profit Maker Enterprises, a company that Herbert said he formed to launder kickbacks from suppliers.

He said the payment was made for awarding a subcontract for parts to Progress Engineering of Westminster.

The three Hughes Aircraft employees who pleaded guilty to kickback and mail fraud charges were John R. Hamilton, 54, of Lakewood; Joseph R. Canfield, 63, of Woodland Hills, and Daniel J. Gordon, 62, of El Segundo.

All three worked as subcontract administrators and buyers at Hughes’ El Segundo facility. They admitted soliciting and receiving kickbacks from Richard Haskell, operator of RH Manufacturing in Chatsworth. Haskell, who was not charged, reportedly told investigators that he usually paid the bribes after receiving contracts to manufacture a variety of parts.

According to court documents, Haskell paid Gordon $7,126, Canfield $5,323 and Hamilton $2,500.

Maximum penalties of seven years in prison and $11,000 in fines could be imposed on Hamilton and Canfield. Gordon is facing a maximum of 10 years in prison and $10,000 in fines. They are expected to receive much lighter sentences because of their cooperation in the investigation.