Final Defendant Sentenced In Public Corruption Case At Sheppard Air Force Base

WICHITA FALLS, Texas — A former engineer at Sheppard Air Force Base (SAFB), Larry Thomas Ballard, 60, of Wichita Falls, Texas, was sentenced today by U.S. District Judge Reed C. O’Connor to 24 months in federal prison and ordered to pay $6,095 in restitution, following his guilty plea in October 2012 to one count of conspiracy to defraud the United States and conspiracy to unlawfully disclose sensitive source selection information. Judge O’Connor ordered that Ballard surrender to the Bureau of Prisons on August 22, 2013. Today’s announcement was made by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Ballard is the fourth and final defendant to be sentenced in connection with a public corruption case at SAFB that involved the unlawful disclosure of source selection information and payment of bribes in connection with government contracts at the base.

The Lead Supervisory Engineer at SAFB and the most culpable in the scheme, John Torrance Gilmore, III, 53, also of Wichita Falls, was sentenced in May 2013 to 60 months in federal prison. He pleaded guilty to one count of conspiring to defraud the U.S. and conspiring to unlawfully disclose sensitive source information.

Two government contractors, John Carmon Freeman and Miguel Angel Hughes, were sentenced to 18 months and eight months, respectively. Each pleaded guilty to one count of conspiring to defraud the U.S. and conspiring to unlawfully obtain sensitive source information.

In addition, Judge O’Connor ordered that Gilmore and Hughes pay $6,095 restitution to the Department of Defense.

Gilmore, as the Lead Civil Engineer in the Civil Engineering Squadron’s engineering department, supervised several engineers, including Ballard. The Squadron’s mission was to maintain SAFB facilities and provide civil engineering support to the base.

Hughes, 63, of Fort Worth, Texas, owned Hughes and Guzman Construction Services, LLC, (Hughes Building Services), a roofing contractor and subcontractor with offices in Fort Worth, Dallas and Balch Springs, Texas. Freeman, 50, of Vernon, Texas, owned Freeman Construction, a road-building and paving contractor, with offices in Wichita Falls and Vernon.

The four defendants conspired together to impair and obstruct the government’s ability to have a competitive and unbiased selection of contractors — depriving the government of its right to exclusive use and control over sensitive source selection information, to include contractor bid information, government pricing and cost estimates and contractor proposal information. The defendants conspired together to knowingly disclose and obtain sensitive source selection information related to specifications on several contracts, including those for roof and pothole repairs and the liquid oxygen maintenance facility.

According to plea documents filed in the case, the defendants conspired together and with others during the period from at least the mid 1990's through 2009, to defraud the 82nd Contracting Squadron and the Department of the Air Force by depriving the U.S. of the lawful right to exclusive use and control over sensitive source selection information, such as contractor bid information, government pricing and cost estimates, and contractor proposal information, on several contracts. They also conspired together and with others to disclose or obtain sensitive source selection information on several contracts.

Gilmore and Ballard provided sensitive source information to their friends, Freeman and Hughes, to give them a competitive advantage or financial benefit in connection with several government contracts. Over several years, Freeman and Hughes gave Gilmore and Ballard personal gifts and benefits in return for their preferential treatment in connection with several government contracts.

In the mid to late 1990's, Freeman paid large sums of cash to Gilmore. Gilmore supervised several government inspectors who inspected Freeman’s work and Freeman felt it would be good to keep Gilmore happy so that he would continue to treat Freeman favorably. On at least one occasion, Freeman gave $10,000 in cash to Gilmore, expecting Gilmore to accept and approve Freeman’s work on future government contracts, even if there were discrepancies and deficiencies in Freeman Construction’s contract work. In addition, to curry favor with Gilmore, Hughes paid Gilmore’s travel expenses and took him to several gun shows.

When Gilmore became aware of this criminal investigation, he told Freeman to lie about his cash payments to him. After initially lying about them to investigators, Freeman later admitted that he had paid cash bribes to Gilmore.

The investigation was conducted by the Defense Criminal Investigative Service and the Air Force Office of Special Investigations.