A West Jordan weapons manufacturing company agreed to pay a $10,000 fine for defrauding the federal government, but company officials worry now about hanging onto the company's federal firearms license.
U.S. District Judge David Sam fined L.A.R. Manufacturing on Thursday, after company officials pleaded guilty to one charge of falsifying labor-cost reports to the U.S. Department of Defense.In exchange for the guilty plea by the corporation, 20 other counts against the corporation and its president, Elden C. Robison, were dropped last fall.
A federal grand jury handed up a 21-count indictment against the company and Robison in May, accusing L.A.R. of falsifying work reports on federal contracts and fraudulently billing the government for that work from February to May 1987.
The case went to trial in September. But midway through the second day of trial, the federal government offered to drop 20 counts against L.A.R. and all counts against Robison if the L.A.R. would plead guilty to one count, said Robison's attorney, Walter Faber Jr.
No one was sent to prison over the fraud because "only the corporation pleaded guilty, and you can't send a corporation to jail," Assistant U.S. Attorney Tena Campbell said.
Faber stressed that the corporation, not its officers or employees, pleaded guilty to fraud. L.A.R. might lose its federal license to possess and manufacture firearms because of the single felony conviction.
Loss of that license could put the company out of business, Faber said. Without that license, the company can't win government contracts and may be prohibited from contracting with commercial firms.
L.A.R. makes .45-caliber semiautomatic pistols for the military, gun components and the Grisley Winchester sports gun. The company reorganized under Chapter 11 bankruptcy two years ago and is working to get back on its feet. L.A.R. lost its federal contracts after the May indictments, Faber said.
L.A.R. laid half its employees off shortly before Christmas, he said.
The federal Bureau of Alcohol, Tobacco and Firearms will decide if L.A.R. can keep its license.
Campbell will send a letter to ATF in the company's behalf, pointing out that L.A.R. was convicted of fraud and not a crime of violence.
"Neither the corporation or its officers appear to be threats to society in the way firearms laws were designed to prevent," she said. "But I won't recommend what ATF does about the license. That is up to them."