Former ThyssenKrupp N.A. Inc. executives Kenneth Graham and Kyle Dresbach were convicted Thursday on charges of conspiracy, money laundering and tax fraud.
A federal jury agreed with prosecutors that the two ran a $6.5 million kickback scheme as they were expanding Thyssens steel plant in Detroit. Graham was the CEO at Thyssen, later renamed ThyssenKrupp, and Dresbach was the vice president. Both retired before they were indicted.
Grahams defense attorney said the jurys one-day deliberation in such a complicated case shows they were swayed by other corporate fraud cases around the country.
Theres no way, with tens of thousands of documents and extremely long and complicated arguments on both sides, that they could have come to this conclusion after a real and substantive deliberative process, said Robert Harrison, partner at Birmingham, Mich.-based Robert Harrison & Associates plc. In my view, this is a verdict tainted by some sort of prejudice, whether it was because of corporate scandals or something else.
Harrison said an appeal is certain.
Graham, dressed in his usual double-breasted, English-cut blazer, remained stoic as the jury read the verdict in U.S. District Court in Detroit. Under sentencing guidelines, the men face up to seven to eight years in prison.
U.S. prosecutors said Graham and Dresbach directed vendors to overcharge Thyssen for equipment, then pocketed the money after it was laundered by their attorney and accountant, Jerome Allen.
Allen was the governments star witness who reached a plea agreement for a reduced sentence in return for his testimony. Allen said he created bogus invoices for Thyssens equipment manager, Lincoln Park, Mich.-based Hurricane Machine Inc., at the direction of Graham and Dresbach. Hurricane Machine collected a commission from equipment vendors and paid that commission to 16 side companies Allen owned or controlled. Allen would then pay Graham and Dresbach.
Defense attorneys said Allen was a tax cheat who borrowed money from Graham and Dresbach and lied to government investigators to save his own skin.
But Assistant U.S. Attorney John Sullivan told the jury that documents and checks between Allen, Graham and Dresbach backed up Allens story.
Justice was done, Sullivan said. The Department of Justice will vigorously pursue corporate executives who defraud their company and fail to report kickbacks on their returns.
He deferred further comment. Sentencing is scheduled for Nov. 19.
Terry Kosdrosky is a staff reporter for Crain's Detroit Business, a sister publication to Automotive News.