Anyone who’s read Glock, The Rise of America’s Gun knows that the Austrian firearms company has been swirling in scandal since the plastic pistol first hit our shores. We’re talking cocaine, hookers, an assassination attempt, payments to journalists to quell concerns about the “light trigger,” international money laundering and more. [Click here for my review.] So it’s no surprise that the Justice Department has indicted a GLOCK distributor for paying $1m in bribes to two GLOCK sales execs to get ahold of 14K discounted law enforcement pistols to sell at full retail to non-LEO consumers. Amongst other things. Make the jump for the DOJ press release detailing the charges. Fans of the brand should remain reassured that GLOCK won’t be phased by the criminal case. They’ve faced worse before and they have very deep pockets . . .
Kansas Firearm Distributor Charged with Paying Bribes and Kickbacks to Glock Executives
U.S. Attorney’s Office
June 04, 2014
District of Kansas
TOPEKA, KS—A Kansas firearms distributor was indicted today on federal charges of paying more than $1 million in bribes and kickbacks to executives of the company that manufactures Glock pistols, U.S. Attorney Barry Grissom said.
John Sullivan Ralph, III, 40, Olathe, Kansas, who was owner of Global Guns & Hunting Inc. of Olathe, Kansas, doing business as OMB Guns, is charged with one count of conspiracy, 11 counts of wire fraud, and 10 counts of money laundering.
The indictment alleges Ralph secretly paid executives of Glock to receive preferential treatment over other distributors of firearms, including directing potential customers to his company, giving his company priority access to limited products, steering government contracts and sales to government agencies of firearms and accessories to his company, and providing confidential Glock information to him.
The following co-defendants are charged with the same counts as Ralph:
James “Craig” Dutton, 42, Acworth, Georgia, who was the assistant national sales manager for Glock. The American headquarters of Glock Inc. is in Smyrna, Georgia.
Lisa Delaine Dutton, 42, Acworth, Georgia, 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.
Welcome D. “Bo” Wood, Jr., 65, Oviedo, Florida, who was the Eastern Regional Manager for Glock.
Paula Ann Wood, 63, Oviedo, Florida, 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.
The FBI investigated. Assistant U.S. Attorney Richard Hathaway is prosecuting.