Federal prosecutors have charged a firearms distributor with multiple counts of wire fraud and money laundering for allegedly paying illegal bribes to executives of a pistol manufacturer in order to receive preferential treatment over his competitors. United States v. Ralph, et al, No. 5:14-cr-40066, indictment (D. Kan., Jun. 4, 2014). Four co-defendants, two of the manufacturer’s executives and their wives, are facing the same charges. After pleading not guilty to all charges, the lead defendant moved for a continuance of the case, claiming that the complexity of the case merited exclusion of time under the federal Speedy Trial Act.
The lead defendant owns a firearms distribution business in Olathe, Kansas, which does a substantial amount of business with the pistol manufacturer Glock. According to the indictment, Glock licenses independent distributors in two different sales channels. Distributors licensed in the “law enforcement market” (LE market) can only sell Glock pistols to law enforcement agencies within a designated geographic area, while distributors in Glock’s “commercial market” can sell to the public with no geographic restriction. Retail prices are lower for the LE market, and pistol sales in the LE market include more magazines than those in the commercial market. The company uses color-coded Universal Product Code (UPC) labels to differentiate pistols intended for each market.
The indictment alleges that the lead defendant paid bribes and kickbacks to two Glock executives, who are also defendants in the case. The executives allegedly provided him with the means to modify the labels on pistols intended for the LE market and sell them on the commercial market at higher prices. At least 14,000 pistols intended for the LE market were allegedly sold to commercial buyers, including retail stores like Cabela’s. The executives’ wives are named as co-defendants and are accused of forming limited liability companies to conceal the bribe and kickback payments.
The defendants face one count of conspiracy to commit multiple offenses. 18 U.S.C. § 371. The indictment’s 11 counts of wire fraud allege the use of wire transfers to send more than $1 million in bribes and kickbacks. 18 U.S.C. § 1343. Ten counts of money laundering allege efforts to conceal the criminal nature of the funds. 18 U.S.C. § 1956. The conspiracy and wire fraud counts could result in 30 years in prison and $1 million fines for each count. The maximum penalties for the money laundering counts are 20 years and $50,000 each.
The alleged scheme described by the indictment is complicated and requires extensive documentation by the government. The lead defendant filed an unopposed motion in July 2014 seeking a continuance in the case based, in part, on the complexity of the issues presented. The U.S. Constitution guarantees defendants the right to a speedy trial, and the federal Speedy Trial Act of 1974, 18 U.S.C. § 3161 et seq., protects that right by establishing strict time limits for the stages of a criminal case. It allows an exception, however, if a “case is so unusual or so complex…that it is unreasonable to expect adequate preparation…within the time limits established by this section.” 18 U.S.C. § 3161(h)(7)(B)(ii).
Michael J. Brown, a board-certified felony defense attorney, has fought for the rights of west Texas defendants in criminal cases for over two decades. To schedule a confidential consultation to discuss your case and see how we can help you, please contact us today online or at (432) 687-5157.
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Former Oil and Gas CEOs Charged with Bribery Under FCPA, Texas Criminal Lawyer Blog, January 24, 2014
Manager of Mortgage Finance Company Convicted in Federal Court of 28 Counts of Fraud, Texas Criminal Lawyer Blog, October 23, 2013
Texas Woman Convicted in Federal Court of Health Care Fraud, Including Several Conspiracy Counts, Texas Criminal Lawyer Blog, September 27, 2013
Photo credit: By Artist Elihu Vedder (1836-1923). Photographed 2007 by Carol Highsmith (1946-), who explicitly placed the photograph in the public domain. [Public domain], via Wikimedia Commons.