Fraud and bribery at Glock

[TripleDigitRide]

http://gunssavelives.net/gun-industry/glock-distributor-and-two-glock-executives-indicted-on-million-dollar-bribery-and-fraud-charges/#


Well, this certainly doesn’t bode well for Glock and one of their distributors. According to a press release by United States Attorney’s Office – District of Kansas, the owner of Global Guns & Hunting Inc., John Sullivan Ralph, III has been indicted on conspiracy, wire fraud and money laundering charges in relation to his dealings with Glock USA.

Two Glock USA executives along with their wives are also named in the indictment. According to the press release,

The following co-defendants are charged with the same counts as Ralph:

James “Craig” Dutton, 42, Acworth, Ga., who was the Assistant National Sales Manager for Glock. The American headquarters of Glock, Inc., is in Smyrna, Ga.

Lisa Delaine Dutton, 42, Acworth, Ga., who was Craig Dutton’s wife, and who formed a company called Supreme Solutions LLC. She is alleged to have concealed payments of bribes and kickbacks.

Welcime D. “Bo” Wood, Jr., 65, Oviedo, Fla., who was the Eastern Regional Manager for Glock.

Paula Ann Wood, 63, Oviedo, Fla, who was Bo Wood’s wife, and who formed a company called Tropical Marketing & Consulting LLC. She is alleged to have concealed payments of bribes and kickbacks.

According to the indictment, most of Glock’s pistols are sold to independent firearm distributors who have contracts with Glock to resell its pistols. The allocation of Glock pistols was important because the demand frequently exceeded the supply.

Glock created two different sales channels for purposes of licensing its distributors. One channel was for sales to law enforcement agencies. Independent distributors were authorized to resell Glock pistols to law enforcement agencies within a specific geographic territory. The other channel was for the commercial market. Distributors of commercial market products were not restricted to a particular geographic area.

Glock used a Universal Product Code to differentiate pistols that were sold for resale to law enforcement agencies (blue label products) from pistols sold for resale to the commercial market (red label products). The price list for pistols intended for resale to law enforcement agencies is lower due to the fact law enforcement agencies routinely buy in bulk and are often subject to bidding processes.

The indictment alleges Wood and Dutton provided Ralph with equipment and software to allow him to convert firearms sold with the law enforcement discount (blue label) to firearms sold at the premium price to the commercial market (red label). Ralph is alleged to have sold at least 14,000 pistols to commercial buyers – including Cabela’s – which Glock sold to Ralph for resale to law enforcement agencies.

The indictment alleges that from 2003 to 2009 Ralph used the U.S. Postal Service to send and receive approximately 140 bribes and kickbacks that were delivered to defendants Lisa Dutton and Paula Wood. Between 2009 and 2011, the indictment alleges, Ralph used wire transfers to send approximately 80 bribes and kickbacks.

Upon conviction, the crimes carry the following penalties:
Conspiracy: A maximum penalty of 30 years in federal prison and a fine up to $1 million.

Wire fraud: A maximum penalty of 30 years in federal prison and a fine up to $1 million on each count.

Money laundering: A maximum penalty of 20 years and a fine up to $50,000 on each count.

[Metalhead]

Wow.

[GlockSpock]

I love my Glock. Is it bad that my label is an odd magenta color? Hahaha. Sucks for them but this isn't bad done by Glock but rather bad done by stupid Glock employees. I got worried before I read the description. Sent from my iPhone using Tapatalk

[bersaguy]

Greed Greed Greed nothing else you can say about it except glad they got caught but another black eye for the gun industry.  Funny how money can make other wise good people become corrupt................ :shrug: :shrug: :shrug:

[runco]

Read the book on Gaston, I am not surprised more greed schemes have not come out. 

[Sam1]

Glock does everything better!

[TrickyNicky]

Read the book on Gaston, I am not surprised more greed schemes have not come out.

Read the same book. Gaston comes off as an arrogant asshat in it IMO. I'm also not shocked.

[Garufa]

Read the book on Gaston, I am not surprised more greed schemes have not come out. 

 

This is not the first time for some executive level drama for Glock.

[leroy]

I think this is the same kind of thing as the Pilot/Flyin J thing... My guess is that the only thing that the Gaston Glock Austrian tribe may be guilty of is usin bad judgement in hiring sales executives in the good ole USA... The presumed malefactors named in the article ain't very Teutonic...

 

Havin said all that; havin a bunch of salesmen (...whether "executive" or not; and none of them in our little TGO band of course....) being crooks ain't exactly new news anywhere...  

 

I'm gonna reserve judgement on the "...they're all in it together..."  and "...it's the gospel truth..." thing and watch to see how this one falls out...

 

While I'm speculating a bit; another thing or two to think about: .... Exactly who furnished the data and "evidence" that all this wuz happenin and why..?   Could it be one rat rattin on another...? Could it be a firearms dealer or salesman in trouble with the IRS or ATF makin a deal...?  Could it be a wild accusation that wuz jumped on by the Feds to smear a large gun manufacturer with the goal of tarring all gun manufacturers and sellers as "crooks"...?  

 

Remember, we gun owners and the Tea Party are equal to the KKK and Satan in their eyes, and they have engaged in a whole bunch of persecution by several of the aparatchiks of government....

 

Interestin to think about how this could come about...  Why would anyone ever think that a bunch of political appointees in the rattiest Justice Department ever would do the right thing about anything...?

They aint up to now...

 

leroy

[Guest Lester Weevils]

So this is a pricing issue where guns were sold legally but in ways that broke the company's official franchise policies? Who exactly were harmed except maybe consumers who paid "too much"? 

 

I'm probably missing the point entirely.

 

Wouldn't it be glock most likely mad at its employees for privately profiting on broken franchise policy? Or distributors who are mad because they didn't get the cozy deal?

Edited June 7, 2014 by Lester Weevils

[Metalhead]

Not really sure actually. Glock is about the only one in the business that adamantly adheres to a strict MAP pricing structure. If Glock finds out that you are advertising their guns for less than what they publish as MAP they will cut you off in a heartbeat. This isn't a "You cant buy from the factory anymore." slap on the wrist, Glock goes so far as to blackball you from anything to do with the company. They tell distributors that soandso dealer cannot buy Glocks, and if that distrib still sells them to you, they get cut off too. They are pretty cutthroat about it.

 

I'd imagine this particular instance has more to do with disguising cheaper LE firearms as commercial weapons on a larger scale. What that has to do with the gov is beyond me, it seems like more of a internal issue than a legal one tbh.

[runco]

I think the rub is the kickbacks and the wives business fronts to conceal the kickbacks.  So what was the kickback and by whom?

Edited June 7, 2014 by Runco

[Lumber_Jack]

Technically it's not Glock that's in trouble. It's the individuals named in the indictment, some of which worked for Glock. They are being charged for basically defrauding the public (and Glock) and pocketing the money through fake businesses. Hence the Laundering and wire fraud indictment. Edited June 7, 2014 by Lumber_Jack

[EMTRN]

I bet Ralph was also pulling the 3rd mag out of each box and selling it.

[monkeylizard]

I'd guess there's some antitrust law involved. That would bring in the feds. There are several about price discrimination, collusion between supplier and seller, etc. which lessen competition.

[A.J. Holst]

Only thing guv'mint is concerned about is their "fair share" of revenue on the bribes, kickbacks and profit margins. They use antitrust, mail/wire fraud and the rest to make us feel good about how guv'mint investigates, prosecutes and enforces the law to protect us little people. Will they prosecute those who paid bribes and kickbacks if discovered some were guv'mint employees? Edited June 7, 2014 by Gotthegoods

[RobertNashville]

A black eye for Glock maybe but it's not the company's fault if a couple of employees go off the reservation.  As long as it wasn't condoned by Glock corporate then all I see is just another case of greedy people breaking the law to satisfy their greed...hopefully they'll pay for it with a lot of time in a very small room.

[Guest Lester Weevils]

Companies have the right to set selling policies within certain regulatory bounds of which I'm woefully ignorant. On the other hand, in some situations have seen in other markets, non gun markets, franchises appeared to be non-competitive and lead to "unnecessarily high" prices and limitations for customers.

 

So, though it is the company's biz within legal bounds to set sales policies, if this is a franchise squabble then it is difficult to get too scandalized over it. Maybe "breaking the rules" led to lower prices for some consumers?

 

OTOH, companies seem to get bent out of shape about employees skimming off the top, on the theory that if skimming is to be done then that money belongs to the company and not the employee. A round about method of theft that the company might prefer charges over?

Edited June 7, 2014 by Lester Weevils

[1gewehr]

It seems to me that the whole problem is caused by the two-tier pricing structure.  What that tells me is that Glock is accepting minimal profits on LE sales and sticking it to the civilian market.  I can certainly understand volume discounts.  But why should a police department be able to buy 500 Glock 19s at a lower price than a distributor?  That's what caused the problem here.  Glock is upset that the profit differential went in someone else's pockets.