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Nine charged in defense contract scam

By JOE B. WARRICK

PHILADELPHIA -- A federal grand jury has indicted a network of Defense Department officials and clothing companies on charges involving kickbacks for contracts to supply peacoats, combat fatigues and other military garments.

The bribery and conspiracy indictments returned Tuesday named five companies, three Defense Department officials, a New Jersey legislator and five other people. Wayne Davis, the FBI agent who headed the investigation, said 'further prosecutions are expected.'

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The three Defense Personnel Support Center employees were charged with accepting nearly $200,000 in kickbacks for steering millions of dollars in contracts to clothing manufacturers in Pennsylvania, New Jersey and Alabama.

The Defense Personnel Support Center, an arm of the Defense Department's Defense Logistics Agency, is responsible for buying military food, clothing and medical supplies for the armed forces.

'This signals the demise of a network of individuals and companies that have been perpetrating fraud on the U.S. government since approximately 1966,' Davis said. 'We're talking about a system that was corrupt and available for corruption.'

Among those indicted for allegedly paying bribes was New Jersey Assemblyman Joseph Chinnici, president of a company that makes Navy peacoats. Chinnici, an eight-term assemblyman, announced last month he would not run for re-election.

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The indictment, which lists charges of bribery, conspiracy and wire fraud, said the lion's share of bribe money went to Frank Coccia, deputy director and top civilian official in the DPSC's Clothing and Textile Division. Coccia, 54, allegedly received $169,000 from contractors between 1982 and 1986.

U.S. Attorney Edward Dennis Jr. said the deals between Coccia and contractors were arranged by Leo Lamer, 65, a retired Defense Department employee.

The companies and officials accused of paying bribes were identified as:

-Major Coat Co. of Bridgeton, N.J., and its president, Chinnici. The indictment said Chinnici agreed to pay Coccia 25 cents for every peacoat he delivered to the Navy. The contract subsequently awarded to the company was worth $5.7 million.

-Selma Apparel Corp., of Selma, Ala.; its affiliated companies, Gulf Apparel Corp. and Dallas Uniform Corp.; Selma president James Utsey and administrative vice president Allen Edwards.

The indictment said Utsey and Edwards paid bribes to Coccia and two other DPSC employees for their help in getting about $200 million worth of contracts to make battle fatigues.

-H. Landau & Co., of Bala Cynwyd, Pa., and its president Emmanuel Landau. Both were charged with wire fraud in connection with the payment of about $15,000 in bribes to Coccia and Lamer.

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In return for the bribes, Coccia was to help Landau obtain contracts to produce $2 billion worth of military cold weather clothing.

Also indicted were DPSC employees Donald Sherry, 51, and Murray Abramowitz, 63, and Joseph Cagno, 64, a consultant linked to Major Coat Co.

The nine defendants were expected to appear in U.S. District Court for an arraignment hearing next week.

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