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Defense contractors guilty in Navy aircraft repair fraud

Owners of two companies and a company are convicted of bribing Navy officials in return for millions in payments for work supposedly done on planes.

March 05, 2013|By Tony Perry, Los Angeles Times

SAN DIEGO — Two defense contractors and a corporation have been found guilty of being part of a fraud and bribery scheme involving phony payments for the repair of military aircraft at North Island Naval Air Station in Coronado.

Robert Ehnow and Joanne Loehr, owners of Poway-based companies, were convicted Monday of showering Navy officials with gifts and cash in exchange for millions of dollars in payments for work supposedly done on planes at the Fleet Readiness Center. Loehr's firm, Centerline Industrial Inc., also was convicted.

Among the items were retail gift cards, flat-screen television sets, luxury massage chairs, model airplanes, bicycles costing thousands of dollars and home repairs. The cost of the bribes was hidden in bills submitted to the Navy, according to prosecutors.

With the verdicts, delivered after a federal jury deliberated for two days, 11 people have now been convicted as part of the scheme, including five former Navy employees.

The scheme involved alleged work on the E-1 Hawkeye, an airborne early warning plane, and the C-2 Greyhound, which ferries personnel and equipment from shore to aircraft carriers.

Ehnow, 46, of Coronado, and Loehr, 52, of La Jolla, face possible prison sentences of 20 years or more when they are sentenced May 20.

"These defense contractors profited, not from doing business the right way, but by fraud and bribery," U.S. Atty. Laura Duffy said.

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