ROCHESTER, N.Y. — U.S. Attorney Trini E. Ross announced today that Reginald Cannon, 55, of Rochester, NY, who was convicted of wire fraud, was sentenced to two years’ probation, fined $200,000, and ordered to pay restitution totaling $315,944.
Assistant U.S. Attorneys Richard A. Resnick and Kyle P. Rossi, who handled the case, stated that Cannon is president of Burnett Process, Inc., a Rochester based company, which, in May 2015, received a five-year contract from the United States Army to produce M98 Gas Particulate Filters. These filters are used by the Department of Defense in a wide range of military systems, such as shelters, mobile hospitals, and US Navy ships, to protect military personnel from chemical, biological, radiological, nuclear, and explosives threats. As fresh air is coming into a system, the filters push out potentially toxic substances. If the filters are not functioning properly, contaminants can get in, putting military personnel at risk. The contract, which was signed by Cannon, required that Burnett Process submit a report certifying that the supplier of the filter paper used to manufacture the M98 Filters complied with the material specifications listed in the contract. The contract also required that Burnett Process use one of two companies located in the United States whose filter paper met strict military specifications for such filter paper, or another company if such filter paper was properly tested, passed all the military specifications included in the contract, and was approved by the Army.
In September and October 2019, the Army ordered 3,650 M98 Filters at a cost of $315,944. When manufacturing these filters, Burnett Process used much cheaper filter paper from a company located in China that had not been properly tested, had not met the material specifications set forth in the contract, and had not been approved by the Army. By using the untested and unapproved cheaper filter paper, Burnett Process’ total cost to manufacture the filters was less than it should have been, which resulted in more profits for Burnett Process. Despite knowing that the proper filter paper was not used, Gannon still certified to the Army that the filter paper used was from one of the two approved filter paper suppliers in the United States.
“This defendant attempted to cut costs and increase his profits by using products that were not in compliance with the contract entered into by Burnett Process Inc. with the United States Military,” stated U.S. Attorney Ross. “Working with our investigative partners, this deception was uncovered before it caused harm to members of our military and this defendant, along with Burnett Process, have been held accountable for their actions.”
“There must be consequences for companies and individuals who not only defraud the U.S. government and taxpayers, but potentially put our warfighters at risk,” said Matthew Scarpino, Special Agent-in-Charge of Homeland Security Investigations Buffalo. “HSI will continue to leverage its unique investigative authorities to further these investigations along with our partners within the Department of Defense and Department of Justice.”
“Protecting the integrity of the Department of Defense procurement process and supply chain is a priority for the DoD Office of Inspector General’s Defense Criminal Investigative Service (DCIS),” stated Special Agent-in-Charge Patrick J. Hegarty, DCIS Northeast Field Office. “We will continue to protect our nation’s military members from unnecessary harm and work with our law enforcement partners to hold individuals and companies accountable for providing substandard, substituted products to the U.S. military.”
“Fraudulent activities by employees or contractors who work with the U.S. Army will not be tolerated,” said Supervisory Special Agent Michael Conner of the Department of the Army Criminal Investigation Division’s Major Procurement Fraud Field Office, Northeast Fraud Resident Agency. “Resolutions such as this one shows our resolve in bringing to justice those who would seek to defraud the U.S. Government and put the safety of our Soldiers at risk.”
The sentencing is the result of an investigation by Homeland Security Investigations, under the direction of Special Agent-in-Charge Matthew Scarpino, the Department of Defense, Office of Inspector General’s, Defense Criminal Investigative Service, under the direction Special Agent-in-Charge Patrick J. Hegarty, Northeast Field Office, and the Department of the Army Criminal Investigation Division, Major Procurement Fraud Field Office, Acting Special Agent-in-Charge Michael Curran.
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