WASHINGTON (AP) — A retired Army colonel pleaded guilty to negotiating his post-military employment with a helicopter company that did business with the Defense Department office he ran while still in uniform, according to court records filed Tuesday by U.S. government attorneys.
The former officer, Norbert Vergez, caused the terms of a contract to be adjusted so that the company would be paid faster, said a plea agreement detailing the charges. Vergez also failed to disclose on his ethics form that he had received a $30,000 check from a second company for relocation expenses. Officers of Vergez's seniority are typically allowed to be reimbursed by Defense Department for their final moving expenses.
The companies are not named in the records, which were filed in U.S. District Court in Alabama. But the documents describe MD Helicopters in Mesa, Arizona, and Patriarch Partners, a private equity firm in New York. Both companies are owned by Wall Street executive Lynn Tilton.
Vergez, 49, went to work for Tilton three months after retiring from military service in November 2012. Attorneys for Vergez did not respond to a request for comment.
The Associated Press reported in March 2014 that Vergez and Tilton were in unusually close contact for more than a year before he retired.
In an emailed statement, Patriarch Partners said it and MD Helicopters cooperated fully with the government's investigation. "Mr. Vergez's plea agreement does not contain any allegations of improper conduct by MD Helicopters, Patriarch Partners, or any of its personnel," according to the statement.
Tilton and Patriarch, however, have been accused by the Securities and Exchange Commission of fraud and misleading investors for more than a decade. The SEC announced the charges last week. Patriarch refuted the allegations and said it would mount a vigorous defense.
Vergez also pleaded guilty to making false statements to the Defense Department's inspector general about his contacts with a Lithuanian company that overhauled Russian Mi-17 helicopters, according to the plea agreement. A wife of a representative of the Lithuanian company, AviaBaltika Aviation, gave Vergez's wife a Rolex wristwatch valued at about $4,000, the court records said. Vergez did not disclose the gift on his ethics form.
Vergez graduated in 1987 from Norwich University, a private military school in Vermont, and earned a master's degree from the Florida Institute of Technology. In the Army, Vergez flew Apache and Cobra attack helicopters. He deployed to Albania in 1999 and later served a tour in Iraq, his service record states. In 2001, Vergez was assigned to the Army command in Huntsville, Alabama, that manages the service's aviation budget.
From early 2010 until he retired from the military, Vergez ran an office that acquired helicopters not in the Defense Department's regular inventory. These "non-standard" choppers, such as the Russian Mi-17s, were provided to Iraq, Afghanistan, Pakistan and other countries battling al-Qaida and other terrorist groups.
During Vergez's tenure, MD Helicopters won U.S. military contracts worth tens of millions of dollars to supply helicopters to the governments of Afghanistan, El Salvador, Costa Rica and Saudi Arabia.
The plea agreement said Vergez reached an agreement in the fall of 2012 with "Company A" for future employment, which would begin in March 2013. The same month Vergez retired "Company A gave the defendant a check for $30,000, the stated reason being that the check was for relocation expenses."
Separately, two former employees of MD Helicopters filed a civil suit last year against Vergez, Tilton and Tilton's companies under the Federal False Claims Act. Philip Marsteller and Robert Swisher said they told their superiors that hiring Vergez would be illegal, according to the lawsuit, but their warnings were ignored.
In their lawsuit, Marsteller and Swisher said they grew increasingly concerned over the "level of Col. Vergez' subservience to Tilton and his continuing involvement in MD's Army contracts" while he awaited a high-paying job with the company that Tilton promised him once he retired from the Army.
Attorneys for Tilton and her companies filed a motion to dismiss the whistleblower case last month. They called the allegations weak and implausible and rejected any claim of impropriety stemming from Vergez's hiring.
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