Lockheed ex-manager pleads guilty Admits to wire fraud, false statements to FEC

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WASHINGTON (AP) – A former Lockheed Martin Corp. employee who stole $160,000 from the company’s political fund pleaded guilty on Friday to multiple counts of wire fraud and making false statements to the Federal Election Commission.

Kenneth D. Phelps, 38, a former deputy manager and treasurer of Lockheed’s political action committee, admitted stealing funds that Lockheed had intended to give to federal political candidates or campaigns by writing out checks to himself between January 2002 and December 2005, the Justice Department said.

Phelps forged the signatures of two other Lockheed executives authorized to write checks and deposited the checks into his personal bank account for his own use. He pleaded guilty before U.S. District Judge Paul L. Friedman of the District of Columbia to 12 counts of wire fraud and 12 counts of making false statements.

Phelps, who lives in Woodbridge, Va., could face up to 20 years in prison and a $250,000 fine for each charge of wire fraud, and up to five additional years in prison and a $250,000 fine for each of the false statement charges.

The divorced father of three, who served as an air traffic controller in both Persian Gulf wars, will be sentenced on Oct. 23, according to his attorney, G. Allen Dale.

Phelps “was going through a rough time in his life when this happened,” Dale said in a phone interview, adding that his client was depressed due to due to a pending divorce and financial difficulties.

Phelps was responsible for preparing contribution checks sent to federal and state candidates on behalf of Lockheed. He kept track of disbursements and receipts within the company’s political action committee computer system, and made periodic filings with the FEC on behalf the company, the Justice Department said.

The agency said Phelps wrote checks to himself in amounts of $500 or $1,000 – commonly associated with political contributions made by Lockheed – in order to evade detection of theft.

Lockheed Martin said in a statement it was pleased the Department of Justice resolved its criminal investigation of Phelps and has fully cooperated with the agency’s investigation.

The Bethesda, Md.-based company was fully reimbursed the $160,000 taken from the company’s political action committee through its theft insurance, a Lockheed spokesman said. The spokesman said Phelps also returned some money to the company.

Shares of Lockheed fell $1.09 to $97.89.

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