Prosecutors swallowed a bitter pill last week when the former owner of a Lincoln-based aerospace firm received a much more lenient prison term than they believe he deserved.
The 2½-year sentence for William Hugh Weygandt, who once headed WECO Aerospace Systems Inc., is just the latest example of how the case centering on the fraudulent repair of airplane parts hasn’t all gone the government’s way.
It’s been a bumpy three-year ride for principal players on both sides. While four men have been convicted so far, U.S. District Judge John A. Mendez has tossed out the charges against one defendant, the government was forced to drop the charges against another, and a third may yet be dismissed.
In imposing Weygandt’s prison term in Sacramento federal court, Mendez dropped more than two years below a range calculated with a formula set out in sentencing guidelines.
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On the other hand, the 64-year-old Weygandt, who has no prior criminal record and is a member of a prominent and respected Placer County family, is not celebrating. He has suffered a damaged reputation, a heavy financial loss, and he has witnessed the scandal stain the name of the company he founded 40 years ago with his father, Hal Weygandt.
The defendant came close to falling apart while being sentenced a week ago, a wrenching ordeal that took more than three hours.
The investigation of WECO began in January 2007 after David Atkins, an electronics technician who had worked at the company 17 years, contacted the FBI and reeled off an astonishing recitation of unlawful practices that he claimed were common at WECO.
According to court papers, Atkins was fed up with what he perceived as the threatening, high-handed management style of Jerry Edward Kuwata, the company’s operations chief in Lincoln. It had another plant in Burbank.
Nearly five years after Atkins put law enforcement machinery in motion – on Sept. 29, 2011 – the aircraft industry was shaken by a 36-count federal grand jury indictment accusing six former WECO executives or supervisors of regularly directing technicians to use unapproved parts for repairs and overhauls.
It was further alleged that the company’s plants did not have the expensive equipment needed to perform testing required by parts manufacturers and the Federal Aviation Administration.
Despite that, the defendants returned the parts to operators of commercial carriers and other aircraft, falsely certifying that repairs were done in compliance with FAA regulations, according to the indictment.
The FAA regulates air travel and publishes regulations that certified repair stations, such as WECO, are required to follow. There have been no known instances in which a fraudulent WECO repair resulted in an aircraft accident.
The government, however, chalks that up to good fortune.
Herb Brown, formerly the special agent in charge of the FBI’s Sacramento field office, said at the time the indictment was returned: “It is appalling that those defendants would put financial gain and reward ahead of the safety and well-being of the many people who could have fallen in harm’s way.”
A probation officer’s report to the court recommended an enhancement of Weygandt’s sentence for “conscious or reckless risk of death or serious bodily injury.”
In response, Weygandt’s lead counsel, Craig Denney, wrote that “the evidence conclusively establishes” the risk portrayed in the report was not real.
At one point, the infamous paper clip incident threatened to become a bone of contention.
In October, Weygandt’s lawyers filed a motion seeking to exclude from his trial any evidence regarding a WECO supervisor’s use of a paper clip in repairing a customer’s windshield wiper motor. The lawyers’ court papers pointed out that the U.S. attorney’s office had incorporated the information into two press releases about the case.
But the matter had nothing to do with Weygandt, “relates solely to the conduct of other(s)” and “has little, if any, probative value with respect to Mr. Weygandt’s participation in the alleged conspiracy,” defense lawyers urged. Presenting it to a jury would be a deliberate attempt to inflame the panel, they said.
As it turned out, the government did not oppose the motion and the issue melted away.
Charged in the 2011 indictment were Kuwata, 63, of Granite Bay; Michael Dennis Maupin, 61, of Arbuckle, who was WECO’s quality assurance manager; Scott Hamilton Durham, 42, of Roseville, the customer service manager; Christopher Warren MacQueen, 56, of Lincoln, a supervisor; Douglas Arthur Johnson, 55, of Granite Bay, a supervisor; and Anthony Vincent Zito, 50, of Saugus, the chief in Burbank.
Charges against Durham and Johnson have since been dismissed.
“The prosecutors finally came to the realization that there was insufficient evidence relative to my guy,” said Durham lawyer William Portanova.
Mendez dismissed the charges against Johnson after learning from defense lawyer Thomas Johnson (no relation to his client) that Assistant U.S. Attorney Sean Flynn had told Johnson to “just tell the truth (before the grand jury) and everything (will) be OK.”
Flynn neglected to inform Assistant U.S. Attorney Kyle Reardon of this before Flynn left Sacramento for a job in New York. Reardon, who took over the case, allowed Johnson to be indicted. The government is appealing Johnson’s dismissal.
A year ago, defense lawyer Malcolm Segal filed a motion seeking dismissal of the charges against MacQueen on grounds similar to Johnson’s.
While MacQueen was still employed by WECO, and during the pre-indictment investigation, “two FBI agents made an unannounced yet carefully preplanned visit to (MacQueen’s) home in Lincoln” at 8:30 p.m., on Feb. 13, 2008, according to the motion by Segal.
The agents were there at the direction of Assistant U.S. Attorney Laura Ferris, who has since left Sacramento, to get information from MacQueen about other suspects, the defense lawyer states in the motion. Ferris had authorized the agents to assure MacQueen that he wasn’t “the one in trouble,” Segal declares.
With that assurance, MacQueen submitted to an interview that lasted nearly three hours and complied with the agents’ request to initiate a recorded telephone call to Kuwata. They promised him “we are not after you,” and MacQueen phoned Kuwata and engaged him in conversation, asking him questions prepared by the agents, the motion says.
MacQueen was nonetheless indicted.
With no opposition from Segal, the government sought, and Mendez granted, an abeyance of MacQueen’s motion until the prosecutors’ appeal of Johnson’s dismissal has been exhausted. All agree that the ruling on the appeal will dictate the fate of MacQueen’s motion.
The other three defendants – Kuwata, Maupin and Zito – pleaded guilty to charges stemming from the conspiracy, testified for the government at Weygandt’s trial, and are awaiting sentencing.
On Oct. 10, 2012, a grand jury returned a superseding indictment, which took the place of the original one. This time, Weygandt was accused in the omnibus conspiracy count of colluding with previously indicted defendants to illegally shave WECO’s overhead and hike its profits.
His lawyers insisted he was not part of a conspiracy, and unlike the other defendants, Weygandt chose to go to trial. But in November, a jury found him guilty of participating in the conspiracy.
“He acted in a supervisory capacity,” defense lawyer Courtney Linn told Mendez at last week’s sentencing. “He did nothing. If anything, he had a passive role. The government’s definition of a conspiracy is overly broad.”
To which Denney added, “The evidence shows the other defendants in this case were the direct perpetrators of the fraud. They are the ones who falsified thousands of certification documents.”
It was a contrite, distraught Weygandt who spoke at the sentencing.
With his voice faltering, gasping for breath and fighting back sobs, he told Mendez he “fell short” of his responsibilities and was “dysfunctional.”
“I hung on to talented but troubled employees,” he said. “I should have installed a stronger system of quality controls. I could have and should have done better.”
Denney contended Weygandt was “a convenient foil” for his co-defendants and for Gulfstream Aerospace Corp., a Georgia-based subsidiary of General Dynamics Corp., which purchased WECO for $17 million in March 2007, two months into the government’s investigation.
Throughout the litigation, Denney has suggested Gulfstream prodded the government to charge Weygandt. The government denies Gulfstream played any part in its decision to pursue Weygandt.
By the time sentencing rolled around last week, Mendez had received 221 letters – totaling 340 pages – supporting Weygandt, many from luminaries in legal, business and political arenas. His family and supporters filled the courtroom’s spectator gallery to overflowing.
His brother, Placer County Supervisor Robert Weygandt, wrote Mendez that the brothers “were raised on a small farm in rural Lincoln. We grew up running a 20-head milking dairy. It was a rewarding life that existed around family, community, honest hard work and responsibility. I live on that farm today and Bill and I raise beef.”
“As a co-owner and employee at Weco for 25 years, I know with certainty that my brother is innocent of the crime for which he was convicted,” he wrote. “It is essential to know that during trial the government horribly misrepresented the truth about my brother, his management of Weco and the FAA regulatory environment in which Weco existed.
“We had a 30-year perfect safety record and consistently received positive audits from the FAA, (and high marks from) customers and trade associations.”
But that was a different time. Now, William Weygandt must surrender on Sept. 23 to begin serving his time behind bars.