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x colonels sentenced in military contra’ ise Page 1 of 2 THE BUSINESS | INSIDER Ex-colonels sentenced in military contract case Associated Press | Oct. 14,2009, 8:00AM | 2 | 8&8 By MELISSA NELSON, Associated Press Writer PENSACOLA, Fla. (AP) — A federal judge sentenced two former Air Force colonels to prison on Tuesday for destroying documents, lying to a grand jury and other crimes related to a wider fraud scheme by contractors and defense lobbyists with ties to a powerful Pennsylvania congressman. The men, both engineers graduates of the U.S. Air Force Academy, are among those accused by federal prosecutors who are looking into alleged wrongdoing by contractors with ties to Rep. John Murtha, D-Pa., chairman of the House Appropriations Subcommittee on Defense. Murtha has not been accused of criminal wrongdoing. U.S. District Judge Lacey Collier sentenced Richard Schaller to 18 months in prison and five years probation. Schaller was convicted of helping Mark O'Hair, a supervisor at the research lab at Eglin Air Force Base, steer contracts to Schaller's defense contracting company. O'Hair previously pleaded guilty to federal charges of false statements and conflict of interest. Collier sentenced O'Hair to six months in prison and three years probation — the strongest sentence he could give under the sentencing guidelines. Also involved in the Eglin case is Richard lanieri, the former chief executive for a defense contractor. lanieri set up a company in Murtha's congressional district and worked closely with another defense contractor in Murtha's district, William Kuchera. Kuchera's company has received tens of millions of dollars in congressional appropriations that were directed to the firm by Murtha. lanieri hired a lobbying firm that at the time employed Murtha's brother. After hiring the firm, lanieri’s company, Coherent Systems International Corp., received a congressional appropriation of more than $8 million. Around that time, Murtha announced in an April 2006 news release that Coherent and Kuchera Defense Systems were working “virtually as one company" on 14 contracts worth $30 million to develop high-tech military gear. lanieri pleaded guilty July 20 to defrauding the Air Force and has been cooperating with federal prosecutors. His sentencing had been set for September, but was delayed indefinitely while he cooperates with the Justice Department in its ongoing probe. On July 29, lanieri testified at Schaller's trial in federal court in Pensacola, Fla., that lanieri had taken $200,000 in kickbacks from Kuchera's company, after providing the defense contractor with $650,000 from the congressional appropriation of over $8 million. Htism ttn-/Awww businessinsider.com/ex-colonels-sentenced-in-military-contract-case-2009-10 10/28/2009