EXHIBIT 10.2
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA :
v. : CRIMINAL NO. 06-268-2
XXXXXX INDUSTRIES :
GUILTY PLEA AGREEMENT
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Under Rule 11 of the Federal Rules of Criminal Procedure, the government,
the defendant, and the defendant's counsel enter into the following guilty plea
agreement. Any reference to the United States or the government in this
agreement shall mean the Office of the United States Attorney for the Eastern
District of Pennsylvania.
1. Defendant Xxxxxx Industries, Inc. ("Xxxxxx") agrees to plead guilty to
Counts 28 and 29 of the Superseding Indictment charging the defendant with
obstruction of federal audits, in violation of 18 U.S.C. Sec. 1516, when, with
intent to deceive or defraud the United States, the defendant obstructed federal
auditors by withholding certain cost and pricing data relating to the
defendant's bids on the two Power Head contracts described in Counts 28 and 29
of the Superseding Indictment. The defendant further acknowledges its waiver of
rights, as set forth in the attachment to this agreement.
2. The defendant agrees to pay the special victims/witness assessment in
the amount of $800 before the time of sentencing and shall provide a receipt
from the Clerk to the government before sentencing as proof of this payment.
3. The parties agree that this plea agreement is made pursuant to
Fed.X.Xxxx.P. 11(c)(l)(C) and that the following specific sentence is their
joint recommendation to the Court for the disposition of this case:
A. The defendant shall pay a fine of $3,500,000. Payment shall be
made within three days of the date of sentencing.
B. The parties agree that for purposes of the Sentencing Guidelines,
pursuant to Guidelines Section 1B1.3, the loss amount to the
government of all relevant conduct in this matter is $2,500,000.
The parties acknowledge that the defendant has entered into an
agreement with the Civil Division of the Office of the United
States Attorney for the Eastern District of Pennsylvania
(hereinafter "the Civil Settlement Agreement"), which settlement
includes full restitution to the Department of Defense and
damages. The parties agree that there shall be no restitution
awarded in this criminal case.
C. It is further agreed that in the event that the Court rejects the
plea agreement, it will do so on the record and in open court,
and will personally advise the defendant: (a) that the Court is
not required to follow the plea agreement and give the defendant
an opportunity to withdraw the plea; and (b) that if the plea is
not withdrawn, the Court may dispose of the case in a manner less
favorable toward the defendant than the plea contemplated.
4. Pursuant to U.S.S.G. Sec. 6B1.4, the parties enter into the following
stipulations under the Sentencing Guidelines Manual effective November 1,2001.
It is understood and agreed that: (1) except as provided in this paragraph,
neither party shall argue the applicability of any provision of the Sentencing
Guidelines, including offense conduct, offense characteristics, criminal
history, adjustments and departures; (2) these stipulations are not binding upon
either the Probation Office or the Court; and (3) the Court may make factual and
legal determinations that differ from these stipulations and that may result in
an increase or decrease in the Sentencing Guidelines range and the sentence that
may be imposed:
A. The Sentencing Guideline applicable to the determination of the
applicable fine for the offense of conviction is U.S.S.G. Sec.
8C2.
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B. The base fine is $2,500,000, under Sec.8C2.4(a)(3).
C. Under Sec. 8C2.5 (a) and (b)(3)(A), the culpability score is 8,
less one point for acceptance of responsibility, under
Sec.8C2.5(g)(3), for a total culpability score of 7.
D. Under Sec. 8C2.6, the minimum multiplier is l.40 and the maximum
multiplier is 2.80.
5. The defendant waives any and all defenses and objections in this matter
as to any payment made to the government in the Civil Settlement Agreement of
any civil claim, including under the False Claims Act and under the Double
Jeopardy and the Excessive Fines clauses of the Eighth Amendment.
6. The defendant agrees that any fine, restitution, assessment, tax,
interest or other payments, including payments made under the Civil Settlement
Agreement relating to the transactions which are the subject of the Superseding
Indictment, do not constitute extraordinary acceptance of responsibility or
provide any basis to seek a downward departure.
7. The defendant waives any claim under the Hyde Amendment, 18 U.S.C. Sec.
3006A (Statutory Note), for attorney's fees and other litigation expenses
arising out of the investigation or prosecution of this matter.
8. At the time of sentencing, the government will:
A. Move to dismiss Counts 1 through 27 and 30 through 33 of the
Superseding Indictment filed on January 30, 2007 as to this
defendant. The defendant waives the statute of limitations as to
all counts to be dismissed under this agreement and agrees that
if the defendant withdraws from, or successfully challenges, the
guilty plea entered under this agreement, or if these counts are
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otherwise reinstated under the terms of this agreement, neither
the statute of limitations nor the Double Jeopardy Clause will
bar prosecution on any of these dismissed counts.
B. Comment on the evidence and circumstances of the case; bring to
the Court's attention all facts relevant to sentencing including
evidence relating to dismissed counts, if any, and to any
criminal conduct of the defendant; address the Court regarding
the nature and seriousness of the offense; respond factually to
questions raised by the Court; correct factual inaccuracies in
the presentence report, if any, or sentencing record; and rebut,
as it deems appropriate, any statement of facts made by or on
behalf of the defendant at sentencing.
Nothing in this agreement shall limit the government in its comments in, and
responses to, any post-sentencing matters.
9. The defendant understands, agrees and has had explained to it by counsel
that the Court may impose the following statutory maximum sentence on the counts
of conviction:
A. Count 28 (obstruction of a federal audit of the response to the 2001
solicitation for 42 Power Heads): a fine of the greater of $500,000 or
twice the sum gained as a result of the obstruction, organizational
probation, a special assessment of $400, and restitution.
B. Count 29 (obstruction of a federal audit of the response to the 2001
solicitation for 139 power heads): a fine of the greater of $500,000
or twice the sum gained as a result of the obstruction, organizational
probation, a special assessment of $400, and restitution.
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Thus, the Total Statutory Maximum penalty that the Court may impose is a fine
equal to the greater of $1,000,000 or twice the sum gained as a result of the
obstruction, organizational probation, a special assessment of $800 and
restitution.
10. The defendant understands and agrees that: (a) the status of any
license or certification held by the defendant is not protected by this
agreement and is a matter solely within the discretion of the appropriate
licensing, regulatory and administrative authorities; and (b) the government
will inform the appropriate licensing, regulatory and administrative authorities
of the disposition of the criminal charges filed against the defendant in this
case.
11. In exchange for the undertakings made by the government in entering
this plea agreement, the defendant voluntarily and expressly waives all rights
to appeal or collaterally attack the defendant's conviction, sentence, or any
other matter relating to the prosecution of all defendants, whether such a right
to appeal or collateral attack arises under 18 U.S.C. Sec. 3742,28 U.S.C. Sec.
1291,28 U.S.C. Sec. 2255, or any other provision of law. This waiver is not
intended to bar the assertion of constitutional claims that the relevant case
law holds cannot be waived.
A. Notwithstanding the waiver provision above, if the government
appeals from the sentence, then the defendant may file a direct
appeal of its sentence.
B. If the government does not appeal, then notwithstanding the
waiver provision set forth in this paragraph, the defendant may
file a direct appeal but may raise only claims that:
1. the defendant's sentence on any count of conviction exceeds
the statutory maximum for that count as set forth in
paragraph 9 above;
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2. the sentencing judge erroneously departed upward pursuant to
the Sentencing Guidelines; or
3. the sentencing judge, exercising the Court's discretion
pursuant to United States x. Xxxxxx, 543 U.S. 220 (2005),
imposed an unreasonable sentence above the final Sentencing
Guideline range determined by the Court.
If the defendant does appeal pursuant to this paragraph, no issue may be
presented by the defendant on appeal other than those described in this
paragraph.
12. The defendant represents that its representative has been duly
authorized to enter into this agreement by its Board of Directors as evidenced
by the attached certified copy of the relevant portions of the minutes of its
Board meeting of April 1, 2008 and a meeting of a Special Committee held on
April 3, 2008.
13. The defendant is satisfied with the legal representation provided by
the defendant's lawyers; the defendant and these lawyers have fully discussed
this plea agreement; and the defendant is agreeing to plead guilty because the
defendant admits that the defendant is guilty.
14. It is agreed that the parties' guilty plea agreement contains no
additional promises, agreements or understandings other than those set forth in
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this written guilty plea agreement, and that no additional promises, agreements
or understandings will be entered into unless in writing and signed by all
parties.
XXXXXX INDUSTRIES, Inc. XXXXXXX X. XXXXXXX
Defendant United States Attorney
/s/ Xxxxx Xxxx /s/ XXXXX XXXX XXXXX
_____________________________________ ___________________________________
By XXXXX XXXX XXXXX
Its CEO & Chairman Chief, Criminal Division
Assistant United States Attorney
/s/ Xxxxx X. Xxxxx /s/ Pamela Foa
_____________________________________ __________________________________
XXXXX X. XXXXX, Esq. XXXXXX XXX
Xxxxxxx for Defendant XXXXXXX X. XXXXXXXXXX
Assistant United States Attorneys
Date: May 5, 2008
