The estranged husband of attorney Gloria Allred, his daughter and two other officers of his local aircraft parts manufacturing and repair firm were arrested in Los Angeles Friday on a San Antonio federal grand jury indictment charging them with selling counterfeit parts to the U.S. Air Force.
William R. Allred, 56, president of Donallco Inc.; Teresa Allred, 34, his daughter by a previous marriage and a company director; Joseph Kehoe, 59, vice president, and Antoine Haddad, 52, a product manager, were charged with 15 counts of mail fraud, wire fraud and making false statements.
The four were taken into custody Friday morning at their North Hollywood company by U.S. marshals acting on the indictment. They were arraigned before U.S. Magistrate Volney V. Brown Jr., who ordered them released on $25,000 bail each and set Feb. 13 for a further hearing.
The defendants were accused of defrauding the federal government by offering to sell and by selling aircraft couplings and drive shafts that they claimed were unused government surplus materials purchased from Norfolk Naval Air Station in Virginia in 1973.
However, it was alleged, the parts were actually manufactured by Donallco itself and never inspected by the government. Another company, Sunstrand Corp., had exclusive manufacturing rights to the Pesco brand aircraft materials Donallco produced, according to the indictment.
It was alleged that the counterfeit parts were delivered to Kelly Air Force Base in San Antonio, Tex., maintenance headquarters for the Air Force's C-130 cargo planes, and elsewhere in the United States from Oct. 20, 1981, until the indictment was issued.
After their arraignment, all four defendants were taken from the court in shackles to post bail. Attorney James Chalfant, a former federal prosecutor, then read to reporters a statement on behalf of the defendants. It said they believed the indictment to be "unjust" and that they would be vindicated in court.
"We look forward to the opportunity to give the true set of facts, rather than the distorted picture the government has painted," the statement added.
Nathan Goldberg, one of Gloria Allred's law partners and an attorney for the defendants, said there was no need for marshals to arrest the four in their offices. If the authorities had telephoned them, Goldberg said, "they would have volunteered to go to Texas." He said they had "fully cooperated" in the investigation.
He pointed out that William and Gloria Allred separated last year and that the feminist attorney is not connected in any way with the case.
Reports of the San Antonio grand jury investigation surfaced nearly a year ago. At that time, a Donallco supervisor made similar charges in a sworn declaration filed in Burbank Superior Court in connection with an unrelated discrimination suit against the company.
Wolfgang Marschall said that the firm was counterfeiting parts and was buying surplus equipment "which is broken down, modified, polished and machined to look like new and sold back to the government as new surplus."
In one case, Marschall said, a C-130 coupling was so poorly machined that it could "malfunction."
He subsequently testified before the San Antonio federal grand jury.
Donallco, which was incorporated in 1950, advertised itself as owning and maintaining "the largest on-the-shelf (aircraft) accessories inventory of any independent supplier anywhere in the world."
It supplied several civilian U.S. airlines and manufacturers, as well as government-operated airlines in Canada and Mexico.
Last October, the Federal Aviation Administration announced it was revoking Donallco's certificate to repair aircraft parts because the company "failed to exercise the degree of care, judgment and responsibility" required.