Ex-U.S Army colonel tied to Tilton equity firm reaches plea deal

Reuters News
Posted: Apr 08, 2015 9:36 AM

By Nate Raymond

(Reuters) - A retired U.S. Army colonel has agreed to plead guilty to negotiating a job with financier Lynn Tilton's private equity firm while also taking steps to ensure a helicopter company that did business with the Department of Defense got paid faster.

A plea agreement for Norbert Vergez, the former officer, was filed on Tuesday in a federal court in Alabama.

Vergez also agreed to admit to failing to disclose that his future employer gave him $30,000 for relocation expenses.

Court papers do not identify by name the helicopter company, MD Helicopters in Mesa, Arizona, or Patriarch Partners, which Tilton runs in New York.

But Vergez, who was a program manager for the Army's Non-Standard Rotary Wing Aircraft project, went on to work at Patriarch as a senior vice president after his retirement from the Army.

Patriarch said on Wednesday that it and MD Helicopters "cooperated fully" with the investigation, and a spokeswoman said Patriarch no longer employed Vergez.

"Mr. Vergez's plea agreement does not contain any allegations of improper conduct by MD Helicopters, Patriarch Partners, or any of their personnel," Patriarch said in a statement.

Vergez also will plead guilty to making a false statement to the Defense Department's inspector general about contacts the unit had with a Lithuanian firm overhauling Russian Mi-17 helicopters, court papers show.

A lawyer for Vergez did not immediately respond on Wednesday to a request for comment.

The plea agreement was made public just over a week after the U.S. Securities and Exchange Commission charged Tilton and Patriarch in a separate case with defrauding investors by hiding poor performance of assets underlying three collateralized loan obligation funds.

Tilton, a flamboyant private equity chief known for her flashy outfits and colorful language, has denied wrongdoing and sued the SEC to block that case from going forward.

Vergez, who is scheduled to appear in court on April 16, faces up to five years in prison on each of the three counts he faces, including making false statements and felony conflict of interest.

The case is U.S. v. Vergez, U.S. District Court, Northern District of Alabama, No. 15-cr-00086.

(Reporting by Nate Raymond in New York; Editing by Paul Simao)