(CN) - A Kansas firearms distributor paid Glock executives 220 bribes and kickbacks totaling more than $1 million for favorable treatment, federal prosecutors claim in court.
John Sullivan Ralph, III, 40, of Olathe, Kan., was charged Wednesday in Topeka Federal Court with one count of conspiracy, 11 counts of wire fraud and 10 counts of money laundering.
Ralph was the owner of Global Guns & Hunting Inc. in Olathe, doing business as OMB Guns.
Indicted on identical counts were James Dutton, 42, of Acworth, Ga., who was an assistant national sales manager for Smyrna, Ga.-based Glock; his wife, Lisa Dutton, 42, of Acworth; Welcome Wood, 65, of Oviedo, Fla., who was an eastern regional manager for Glock; and his wife, Paula Wood, 63, of Oviedo.
"Ralph paid kickbacks and brides to ... high ranking executives of Glock ... to receive preferential treatment over other distributors of firearms including, directing potential customers to OMB, giving it priority relative to the allocation of limited products, steering government contracts and sales to government agencies of firearms and accessories to OMB, as well as providing confidential Glock information to Ralph and OMB," the 15-page indictment states.
"Defendants Lisa Delaine Dutton and Paula Ann Wood conspired and aided and abetted their co-conspirators by concealing the payment of bribes and kickbacks and their purpose."
Prosecutors say Glock has two different price lists for the separate commercial and law enforcement markets it sells to. They say the allocation of Glock pistols to distributors is important because the demand often exceeds supply.
"The price list for sales to the LE [law enforcement] market are less than for sales to the commercial market," the indictment states. "This price differential reflects that sales to the LE market are routinely done on a bulk basis and are often subject to bidding or other competitive process."
Distributors can sell Glock pistols to law enforcement only within a specific geographic territory, but can sell commercial products without geographical restriction.
Prosecutors say the two Glock executives provided Ralph with equipment and software to convert firearms with the law enforcement discount ("blue label") to firearms sold on the commercial market with a higher price ("red label").
Ralph allegedly sold at least 14,000 of the converted pistols to commercial buyers, most of them to retailer Cabela's, according to the indictment.
Ralph also allegedly removed the extra third magazine from the law enforcement pistols and sold 12,000 of them separately for additional profit.
Between 2003 and 2009, Ralph sent approximately 140 "discreet" bribes and kickbacks through the mail to Lisa Dutton and Paula Wood, the indictment states. An additional 80 bribes and kickbacks were allegedly transferred via wire from 2009 to 2011.
If convicted, the defendants face up to 30 years in federal prison and up to $1 million in fines on each of the conspiracy and wire fraud charges and up to 20 years and up to $50,000 in fines on each money laundering count.
OMB Guns did not immediately respond to a request for comment Wednesday afternoon.