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 BOSTON, Aug. 13 /PRNewswire/ -- A Waltham, MA firm pled guilty today in U.S. District Court in Boston, MA, and was sentenced, for its participation in a conspiracy to defraud the United States.
 U.S. Attorney A. John Pappalardo announced that Barker Steel Co., Inc. (Barker), a Waltham, MA steel rebar fabrication firm, pled guilty to participating in a conspiracy from October, 1982 to July, 1986 to defraud the United States by impeding, impairing, obstructing and defeating the lawful governmental function of various federal agencies in the implementation, administration and execution of their Minority Business Enterprise (MBE) programs. United States District Court Judge Robert E. Keeton, who found their was a factual basis for the guilty plea, accepted it, and sentenced Barker to pay a $100,000 fine and a $200 special assessment.
 On May 3, 1991 the United States filed a Criminal Information in U.S. District Court in Boston, Mass. charging Barker and its president, Robert B. Brack, with having participated in a conspiracy to obstruct the MBE programs of the U.S. Department of Transportation, Environmental Protection Agency (EPA) and General Services Administration (GSA), by means of a "front company" scheme in which jobs were performed by Barker, but contracts were placed in the name of Rusco Steel Company (Rusco), a Warwick, R.I., MBE firm, so that the amount of the contract could be submitted towards the federal MBE goals on the job. According to the Information more than $5 million in federal and federally assisted construction contracts were improperly diverted to Barker pursuant to the conspiracy.
 Barker is now, and was during the conspiratorial period, the largest steel rebar fabrication firm in New England. In 1992, Barker had net sales of $48.2 million. During the years in question in his case, 1982 to 1986, Barker had net sales of $173 million. Rebar is steel rods used to reinforce concrete in construction projects. Fabrication firms, such as Barker, cut and bend the rebar to meet job specifications and deliver the steel to the job site.
 According to evidence presented to Judge Keeton, Barker bid the jobs in question in this case, purchased the steel, cut and bent the rods and delivered the steel to the job site. The contracts were placed in the name of Rusco, however, so they could be submitted for credit towards the MBE goals on the job.
 Barker prepared two sets on invoices for the job, one showing a sale from Barker to Rusco and a second set, at exactly the same price, showing a sale by Rusco to the general contractor. When the general contractor paid for the steel, the funds were deposited into an account in Rhode Island in the name of Rusco and then transferred to an account in Massachusetts in the name of Rusco, but managed by Barker. Barker is also alleged to have engaged in a sham corporate reorganization in the spring of 1985, in which it transferred the plant, equipment, inventory and employees of its Rhode Island subsidiary, Plantations Steel Company, to Rusco, in order to deceive and mislead, state MBE certifying officials. Pursuant to the plea agreement by which Barker pled guilty, the United States dismissed the charges pending against Barker's president, Robert B. Brack.
 In imposing sentencing, Judge Keeton said he found that Barker was motivated by economic reasons in engaging in its illegal conduct and that the sentence should serve to both punish Barker and deter others. Judge Keeton rejected arguments that Barker's sentence should be mitigated because of the consultations it had with its outside counsel and the claim that everyone else was doing the same thing. Judge Keeton found that Barker's course of conduct was illegal from the beginning and it changed its conduct only after MBE authorities began an investigation.
 In July, 1989 Rusco and its President, Robert S. Russell, pled guilty to submitting false statements to the Massachusetts State Office of Minority Business Assistance (SOMBA) in connection with the "front company" scheme alleged in this Information. In October, 1989 Rusco and Russell were each fined $10,000 and Russell was ordered to serve three years probation.
 In September, 1991 U.S. District Court Chief Judge Joseph L. Tauro dismissed the current charges against Barker and Brack, finding that the Information did not properly allege that Barker and Brack had violated any duty owed to the United States. In February, 1993 the United States Court of Appeals for the First Circuit reversed that order, and remanded the case for trial, finding tat the Information properly alleged a conspiracy to defraud the United States, in that it alleged a conspiracy to divert, by deceitful means, the benefits of MBE programs, from their intended recipients, to Barker.
 The case was investigated by Special Agents assigned to the Inspector General's offices of the U.S. Department of Transportation, Environmental Protection Agency and the General Services Administration and was prosecuted by Assistant U.S. Attorney Peter A. Mullin and EPA Regional Criminal Enforcement Counsel, Andrew E. Lauterback, who was appointed a Special Assistant U.S. Attorney. Pappalardo thanked and commended each of the other federal agencies for their efforts in this case.
 -0- 8/13/93
 /CONTACT: Press Officer of U.S. Attorney's Office, 617-223-9445/

CO: U.S. Attorney's Office Boston; Barker Steel Co., Inc. ST: Massachusetts IN: MNG SU:

TM -- NY097 -- 2774 08/13/93 19:25 EDT
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Publication:PR Newswire
Date:Aug 13, 1993

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