Texas man sentenced to more than 3 years in prison for providing faulty military parts


Date: April 26, 2024

Contact: newsroom@ci.irs.gov

Columbus, OH — A Texas was sentenced in U.S. District Court here today to 37 months in prison for crimes related to providing faulty parts to the U.S. military.

Philip R. Huddleston of Ft. Worth, supplied the United States military with unapproved and substituted parts as a Department of Defense (DoD) contractor.

Since 2013, Huddleston was a civilian employed as a quality assurance specialist at the Defense Contract Management Agency. Since 2018, Huddleston also co-owned WM Industries, a DoD contractor in Beaumont, Texas, who sold and supplied a variety of military parts to the DoD.

Huddleston co-owned the DoD parts business with Gregory Gotreaux, 56, of Beaumont, Texas, who is also convicted in this scheme. Gotreaux was sentenced in November 2023 to 21 months in prison.

According to court documents, Huddleston and Gotreaux conspired to supply the United States with unapproved and substituted parts on 41 orders totaling at least $704,000.

Specifically, from November 2019 through September 2021, Huddleston and Gotreaux provided nonconforming parts used in various U.S. military defense and weapons systems. The defendants were paid by the Defense Finance and Accounting Service (DFAS) located in Columbus.

The two men pleaded guilty to wire fraud and engaging in monetary transactions in criminally derived property.

The defendants have agreed to pay $706,000 in restitution, which includes approximately $2,100 for testing costs to the DoD.

“The Defense Criminal Investigative Service (DCIS), the law enforcement arm of the U.S. Department of Defense (DoD) Office of Inspector General, is fully committed to protecting the integrity of the DoD supply chain,” said Patrick J. Hegarty, Special Agent in Charge of the DCIS Northeast Field Office. “Supplying nonconforming parts to the DoD compromises military systems and potentially endangers the lives of U.S. service members. We will continue to partner with the Defense Logistics Agency, Internal Revenue Service Criminal Investigation, and Department of Justice to ensure that DoD contractors provide approved material and quality products to the U.S. military.”

Kenneth L. Parker, United States Attorney for the Southern District of Ohio; Karen Wingerd, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation (CI); and Patrick Hegarty, Special Agent in Charge, Defense Criminal Investigative Service (DCIS) announced the sentence imposed today by Chief U.S. District Judge Algenon L. Marbley. Deputy Criminal Chief Jessica W. Knight and Special Assistant United States Attorney J. Michael Marous are representing the United States in this case.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.