Federal Trial Begins Over Fraud Alleged In Ct Bus Repairs
Seattle Times Snohomish County Bureau
One thing's agreed upon: It was greed that launched a headline-making FBI raid on Community Transit headquarters outside Mill Creek three years ago.
But who was greedy? There the agreement stopped during opening arguments yesterday in U.S. District Court in Seattle.
Federal prosecutors say Ralph Woodall, 50, bilked the Snohomish County transit agency out of hundreds of thousands of dollars by intentionally overbilling for bus-transmission repairs performed at an Everett shop he co-owns, Ed's Transmission-Allison Inc.
Defense attorneys say CT got more than its money's worth in the form of bus transmissions that were better than new. The only culprit, they say, is a whistle-blower who triggered the investigation: a former Ed's Transmission mechanic who they allege was motivated by revenge and wants to make money by pursuing a civil suit against Woodall.
Woodall, of Marysville, has been indicted on 16 counts of mail fraud for allegedly billing CT through the mail for transmission parts that were not installed and charging new-parts prices for rebuilt parts. The federal government is involved because CT operations rely in part upon federal funds.
The trial is expected to conclude next week. Woodall could face a maximum five-year prison sentence and a $250,000 fine on each count, and could be ordered to repay CT.
When FBI agents raided Ed's Transmission shops and CT's office in July 1993 to seize bus parts and documents, a kickback scheme was alleged to exist within CT's repair department.
CT maintenance director Michael Lynn quit his job the next month, after telling investigators he'd accepted gifts from Woodall such as a Canadian fishing trip and 16 months' free use of a bulldozer, according to federal documents.
Although Lynn hasn't been indicted, Assistant U.S. Attorney Robert Westinghouse yesterday told jurors they may hear testimony that could make them conclude that Lynn "was in cahoots" with Woodall during the alleged scam from 1985 to 1992.
Westinghouse later declined to comment on whether Lynn still faces indictment.
Attorneys for Woodall and Ed's Transmission hope to convince the jury that Woodall is a regionally admired specialist on Allison-brand bus transmissions. CT has known for years that the rebuilt transmissions Woodall installs in its buses aren't made of new parts but rather are built with re-engineered parts that make them more dependable than new transmissions, defense attorneys said.
Despite the federal allegations, Ed's Transmission-Alliance has continued to rebuild transmissions for other clients, including Kitsap Transit, the Federal Emergency Management Administration and 15 school districts. CT switched companies in 1993.
`Virtually no oversight'
Westinghouse told the jury that under Lynn's reign, CT sent all its transmissions to Ed's, never sought competitive bidding, never asked for estimates and neither asked for nor received parts taken from CT buses.
"There was virtually no oversight of this vendor," Westinghouse said.
CT since has overhauled its policies on outside repairs. All contracts are now handled by CT's central-purchasing department.
CT's leadership is different, too, with a new executive director and several new department heads. The agency is overseen by a board of directors consisting of elected officials from throughout the county.
In at least two cases, CT was billed for two rebuilds of the same transmissions within a single calendar year, Westinghouse said. In one case, CT paid Ed's $5,200 for a rebuilt transmission just three months after its previous rebuild, he said.
Bills sent to CT include the serial numbers of parts allegedly installed, but those numbers don't match parts inside transmissions, Westinghouse said.
CT's new transmission-repair company has taken apart 47 transmissions previously rebuilt by Ed's, and 46 of them contain parts that were improperly billed, with virtually no new parts, he said. While Ed's rebuilds averaged $7,300 apiece, the new company's average charge is $3,700.
Whistle-blower to testify
According to court documents, Woodall told FBI agents in 1993 that he intentionally billed CT for parts not installed and charged new-part prices for rebuilt parts because he needed to make up for losses he suffered on low-bid work for other customers.
Woodall also allegedly told them he needed to recover for damage caused by CT mechanics, the cost of CT warranty work and the cost of several unbilled "spare" transmissions he supplied CT for emergencies.
Witnesses are to include former Ed's Transmission mechanic Bob Taylor, who took complaints about billing discrepancies outside the agency, eventually to the FBI, Westinghouse said.
Woodall's attorney, Murray Guterson, told the jury the entire case is based on Taylor's greed. Taylor wants to make money by pursuing a civil suit against Woodall, Guterson said.
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