The Tribune Democrat, Johnstown, PA

Local News

December 17, 2013

Kucheras avoid prison: Brothers get house arrest

JOHNSTOWN — Two brothers facing years in prison for spending defense funds on private trips and lobbying fees left a federal court after being sentenced to 18 months house arrest and five years probation Tuesday.

Despite a federal prosecutor’s pleas to a federal judge to send “a strong message” – jail time – about the consequences of swindling the government, U.S. District Judge Kim R. Gibson handed down a lesser sentence, calling Ron and William Kuchera’s crimes an aberration in lives otherwise dedicated to helping those less fortunate.

“I expect you to justify the trust we’re putting in to you – that you won’t reoffend,” Gibson told both men, founders of the former Kuchera Defense Systems firm. The judge cited $500,000 fines levied against them, home confinement and orders they provide 1,000 hours of community service as reminders of the consequences of major fraud and conspiracy to defraud the government.

A standing-room-only crowd of nearly 100 packed the Washington Street federal courtroom as a show of support for the Kuchera brothers, whose attorneys, Stanton Levenson and Meagan Temple, pointed to the crowd size and more than 150 support letters as proof of years of charitable work by the men.

Carl Sax, Kuchera Defense’s former general manager, noted the Kuchera brothers grew their defense company to become the nation’s small business of the year nearly a decade ago by training and hiring individuals with disabilities, a point of pride. In an effort kick-started by a defense-assisted mentor and protege program, nearly one-third of their total workforce represented employees with disabilities for much of a 15-year period, Sax added.

Defense attorneys painted a Robin Hood-esque picture of the pair, saying the Kucheras committed fraudulent acts at the same time they were providing food for the hungry or donating to dozens of local charities.

Both men said they “made mistakes.”

They told a judge their acts – and eventual indictments – embarrassed them and brought shame to their families.

“I’m truly sorry,” Ron Kuchera said in court. “I used poor judgment.”

Assistant U.S. District Attorney Nelson Cohen said the Kucheras downplayed their crimes.

“These were more than just lapses in judgment,” he said. “These were repeated, open-eyed acts. They were spending the taxpayers’ money ... and they knew it.”

Even further, they created a paper trail to cover up their actions, hiding a private airplane purchase, property in Florida and lobby payouts as business expenses, Cohen said. A bone fishing expedition was written off as “business supplies,” he said, citing a deal with former Coherent Systems International head Richard Ianieri as the most glaring example of swindling government money “that they didn’t earn.”

The federal courts should send a message to those who might consider doing the same “that you can’t just write a check” and move on, Cohen said.

“You might lose your freedom for a little while,” he said.

Gibson said he saw his sentence differently, saying the pair will be able to continue charitable work while on home confinement – and electronic monitoring. That order as well as their five years probation are also “a punishment,” he said after Ron Kuchera’s sentencing.

The ruling prompted Cohen to pass on his chance to make an argument for a jail sentence for William Kuchera, who was sentenced separately.

“After hearing the reasons given (by the court), there are no arguments I could make worthy of taking up the court’s time,” he said.

In addition to their fines, the brothers were ordered to forfeit a combined $900,000, or $450,000 each, to the government and repay money owed to the Department of Defense and the IRS. Gibson said the Kucheras already completed the latter, with Ron Kuchera paying more than $1.07 million and his brother, more than $1.08 million.

The Kucheras did not address the press after the hearing, but told the court they plan to dedicate their lives to helping needy individuals.

They have started a nonprofit called Please Help, where cattle they raise on their Richland property will be butchered and then delivered to food pantries and similar charities.

“These are good men ... that made a mistake,” said Dennis McGlynn, their longtime defense firm attorney, saying the Kucheras started from humble beginnings and got “caught up” in defense industry trappings. “Things were going so fast. Mr. Ianieri promised them pie in the sky and they fell under his spell.”

Ianieri received five years probation in 2010 after cooperating with a government investigation into lobbying practices.

He admitted in a Florida federal court to accepting a $200,000 kickback from a contract he directed to Kuchera Defense.

David Hurst is a reporter with The Tribune-Democrat. Follow him on Twitter at www.twitter.com/tddavidhurst.

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