A military contract fraud lawsuit regarding a $6.1 million overbilling scam has resulted in three years’ probation and six months’ house arrest for the former chief financial officer of a Pennsylvania company.

Defendant Harry H. Kramer pled guilty to accusations that he committed major fraud against the Department of Defense and filed false tax returns on behalf of a company called Ibis Tek LLC in 2009 and 2010.

He is one of five people charged with military contract fraud against the U.S Department of Defense by buying $20 Humvee escape windows from China and creating false invoices to make it appear the company had paid $70 per frame. Ibis Tek also allegedly sold scrap aluminum they collected during manufacturing, but did not credit that money to the U.S. Army’s TACOM Life Cycle Management Command, formerly known as the Tank-Automotive and Armaments Command. The military contract fraud caused TACOM to lose $6.1 million.

Ibis’ former co-owners were Thomas G. Buckner and his brother John P. Buckner, who formed a company called Alloy America LLC and used Alloy to purchase the $20 frames from China. At the time, Ibis was a military subcontractor for TACOM.

Ibis itself was not charged, but Thomas Bucker received a 30-month prison sentence and was ordered to pay a $500,000 fine. For his part in the scam, John Buckner was sentenced to two years in prison and a $300,000 fine. The men also pled guilty to major fraud and to filing false tax returns, just like Kramer.

The latter charges stemmed from the selling of the scrap aluminum and for taking unallowable business deductions, resulting in total losses of $423,473 in the form of falsified tax returns.

The IRS collected more than $940,000 in restitution penalties and interest from Thomas Buckner, and they collected more than $980,000 from his brother John.

A $12.2 million civil settlement stemming from the military contract fraud was finally paid in full to the U.S Department of the Treasury earlier this month as part of charges made through the False Claims Act.

At one time, Anthony A. Shaw was a civilian TACOM employee who worked as a deputy project manager. He managed government contracts for the Humvees. He pled guilty to give charges and was given a 46-month prison sentence, fined $100,000, and ordered to pay the IRS $325,800 in restitution.

Shaw’s part in the military contract fraud included receiving $1.1. million in illegal gifts from Thomas Buckner’s D&B Cycle Parts and Accessories company. The ill-gotten money came to him in the form of checks, cash, and wire transfers, and Shaw did not report the gifts as income. This failure resulted in income tax evasion charges for the years 2009 and 2010.

Not related to the Buckner brothers is D&B Cycle owner David S. Buckner, who will face sentencing on Nov. 6 to a charge of impeding the IRS by accepting money on Shaw’s behalf, allowing Shaw to hide the income.

The Military Contract Fraud Lawsuit is Case No. 2:17-cr-00059 in the U.S. District Court for the Western District of Pennsylvania.