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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Texas

Thursday, May 23, 2013

Former Sheppard Air Force Base Employees And Contractors Sentenced For Conspiring To Unlawfully Disclose And Obtain Sensitive Government Contract Information

DALLAS — Three of the four individuals who pleaded guilty last year to their roles in a conspiracy to unlawfully disclose and obtain sensitive government contract information, were sentenced today in federal court in Dallas by U.S. District Judge Reed C. O’Connor, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

U.S. Attorney Saldana said, “The public deserves to have absolute confidence that government employees are honest and above reproach in their dealings with government funds and private contractors. This prosecution sends a strong message that they will be held accountable for their betrayal of the public trust.”

John Torrance Gilmore, III, 53, of Wichita Falls, who was the Lead Supervisory Engineer at Sheppard Air Force Base (SAFB), and the most culpable in the scheme, was sentenced 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.

Another former employee at SAFB, Larry Thomas Ballard, 60, also of Wichita Falls, pleaded guilty to the same offense and is scheduled to be sentenced on July 19, 2013.

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. All three defendants must surrender to the Bureau of Prisons on June 20, 2013.

As the Lead Civil Engineer in the Civil Engineering Squadron’s engineering department, Gilmore 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 several contracts’ specifications, 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 took him to several gun shows and paid his travel expenses.

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.

Assistant U.S. Attorney David Jarvis is in charge of the prosecution.

Updated June 22, 2015