Local News in Brief : Valencia Aerospace Firm Fined $400,000 for B-1 Bomber Fraud

A Valencia aerospace firm that has admitted overcharging the government for parts it made for the B-1 bomber was fined $400,000 on Monday, but sentencing was delayed for the firm’s former owner and general manager, who have pleaded guilty to fraud charges.

The fine was levied against Butler Industries by U.S. District Judge Stephen V. Wilson for a scheme by the firm’s former owner and general manager to overcharge the federal government by about $200,000 for parts the firm made for the B-1, Assistant U.S. Atty. Brian Hennigan said. He said Butler Industries, which does precision metal work, was producing parts for the aircraft as a subcontractor for Rockwell International.

The firm’s former owner, Robert Butler, 54, and general manager, Steven Wooten, 30, have pleaded guilty to the fraud scheme. Butler, of Encino, and Wooten, of Newhall, are scheduled to be sentenced July 11. Hennigan said Butler Industries is a fairly large defense firm with more than 450 government contracts totaling $26 million.

James A. Twitty, attorney for Butler Industries, said the firm agreed to pay the fine even though the B-1 scheme was devised by Butler and Wooten, not the company. He said the firm still will be allowed to bid on government contracts because of its cooperation in the criminal investigation.

Butler Industries also pleaded guilty to two tax-related charges but was not sentenced on those counts.

Butler Industries admitted that it filed fraudulent income tax returns, Hennigan said. The company admitted issuing checks totaling $144,000 to fictitious persons and then deducting the amount as a legitimate business expense on tax forms between 1982 and 1985. The firm also failed to report $60,000 from the sale of scrap metal, Hennigan said.

Hennigan said Butler Industries was sold in July, 1987, and that the current owners were not involved in the fraud.