A Robinson man accused by the federal government of making a $500,000 profit by substituting lower-quality parts to fulfill military contracts was found guilty on Tuesday of wire fraud and failure to pay taxes.
Donald Smith, 75, could face federal prison when he is sentenced by U.S. District Judge J. Nicholas Ranjan.
A date has not yet been set.
According to documents filed in the federal court case, Smith served as a consultant for two companies and operated his own, Smith & Jamison Corporation, in fulfilling contracts for the Defense Logistics Agency, which managed the global supply chain for America’s military.
Smith had worked in that field for years, and on three separate occasions, according to the superseding indictment, was prohibited from fulfilling a federal government contract — called being debarred.
The government could debar a contractor, the indictment said, if they violated the terms of a contract, including through a willful failure to perform, a history of failing to perform or unsatisfactory performance.
Smith was debarred from November 2010 to November 2013; from June 2015 to June 2018; and Smith & Jamison was debarred from June 2015 to June 2018.
However, according to the indictment, from April 2019 through Oct. 8, 2024, Smith devised a scheme where he and two companies he consulted for would bid on contracts, assure the federal government they would meet the specifications and source requirements, and then fulfill the orders with lesser products that did not meet the contract terms.
Part of that scheme, the indictment said, included providing consulting services to Gold Peak Industries LLC, based in Washington, and Wolfpack Supply LLC, based initially in Washington, which has since gone out of business.
The government alleged that Smith told those companies what contracts to bid on and how they should list the products to be sourced.
Then, once they won the contracts, Smith often told the companies to source the products from elsewhere, including Amazon and other online retailers.
Among the products that failed to meet specifications, the companies were supposed to provide 2,352 LED light bulbs that cost approximately $50 each meant for American submarines, and instead fulfilled the order with fluorescent bulbs purchased online for $0.99 each.
Another example at trial showed the companies were supposed to provide custom-made circulating fans intended for Bradley tanks but instead bought box fans from other online retailers.
The government examples also included screws, bolts, lock nuts and other materials that were not made of the same quality or even the same materials required by the contracts, court documents showed.
Often, the prosecution said, the deficient products were discovered prior to their installation but after they entered the defense supply chain.
In addition to the wire fraud charges, the government alleged that Smith did not file corporate tax returns from 2019 through 2023, failing to report more than $1 million in payments his company received.
Defense attorney Kevin Chernosky said on Tuesday that they respect the jury’s verdict.
“We thought we put enough before them to find our client not guilty, but clearly they rejected that,” he said.
They are now focused on next steps including filing a renewed motion for dismissal and sentencing, Chernosky said.
