The owners of a Rio Rico business agreed to pay the federal government $2.1 million to resolve a fraud probe, court documents state.
Paul S. Grillo and Raymond Lawson, owners of Barrier Wear Inc., pleaded guilty to one felony count of obstructing a federal auditor, according to a plea agreement with federal prosecutors filed Dec. 9 in U.S. District Court in Tucson.
The company, located at 9 Ojo Court in Rio Rico and Broomfield, Colorado, sold extended cold wear clothing systems to the U.S. military from 2008 to 2012.
During each of those years, Barrier Wear shipped more than $100,000 worth of jackets and trousers to Virginia-based Atlantic Diving Supply, the company that held the primary contract with the military.
Before each shipment, Barrier Wear representatives signed a product quality assurance statement with the Defense Contracting Management Agency.
Grillo and Lawson admitted to falsely stating the goods listed in the statement conformed to the contract specifications.
Court records do not indicate how the garments did not conform to the contract requirements.
Defense attorneys in Tucson and Georgia representing Grillo and Lawson declined to comment.
A spokesman for the Department of Defense referred questions to the U.S. Attorneyβs Office, which declined to comment prior to the March 7 sentencing hearing.
In addition to paying $2.1 million, Grillo and Lawson agreed to serve a term of probation.
The maximum penalty for the offense is a $250,000 fine, five years in prison, and three years of supervised release.
