Perry, FL – Maryland Assemblies, Incorporated (MAI), a defense contractor specializing in pyrotechnic and explosive materials, was at the center of a sprawling fraud and environmental crime case in 1992. The company, which manufactured goods for the U.S. Army, Air Force, and Navy, and its executives were accused of systematically defrauding the government and illegally disposing of hazardous waste. The case, originating with a 192-count indictment in December 1991, exposed a pattern of falsified invoices and misleading documentation designed to illicit over $11.2 million in progress payments from Department of Defense contracts.
The investigation, led by the Environmental Protection Agency (EPA) and federal prosecutors, revealed that MAI, under the direction of CEO and owner William S. Drum, III, had allegedly engaged in a complex scheme to inflate costs and misrepresent the status of ongoing projects. The indictment alleged not only fraud, but also violations related to the handling of explosive materials and the improper disposal of dangerous waste – a combination that raised serious questions about the company’s commitment to both financial and environmental responsibility. The company transitioned from a Maryland to a Florida corporation in late 1988, further complicating the jurisdictional aspects of the case.
A series of guilty pleas began to surface in early 1992, chipping away at the initial wall of denials. Edward Viola, President of MAI, admitted guilt to two counts: conspiracy to submit false statements (18 U.S.C. 371) and violating the Resource Conservation and Recovery Act (RCRA) through the illegal disposal of hazardous waste without a permit (42 U.S.C. 6928(d)(2)(A)). Edward W. Viola, the company’s engineering manager, also pled guilty to one count of making false statements (18 U.S.C. 1001). Further pleas from Jesse V. Hickman, Timothy L. Stanton, Herr, and Rogers followed, indicating a widening net of culpability within the organization.
The case ultimately went to trial for William Drum, along with Lahiff and Stewart. All three were found guilty on the charges leveled against them. The prosecution successfully demonstrated a pattern of intentional deception and a disregard for environmental regulations. The fraudulent activities were not isolated incidents but rather a systemic attempt to enrich the company and its leadership at the expense of the government and potentially, public health and safety.
The sentencing reflected the severity of the crimes. Edward Viola received 12 months of home detention, a six-year probationary period, and was ordered to pay $2,287,495.00 in restitution. While details of the sentencing for Drum, Lahiff, and Stewart were not immediately available, the guilty verdicts sent a clear message that environmental and financial crimes involving government contracts would not be tolerated. The case served as a cautionary tale for other defense contractors, emphasizing the importance of transparency, accountability, and adherence to both financial and environmental regulations.
Key Facts
- Defendant: Maryland Assemblies, Incorporated (MAI)
- Location: Perry, Florida
- Year: 1992
- Crime: Fraud, Illegal Hazardous Waste Disposal
- Statutes Violated: 18 U.S.C. 1001 (False Statements), 18 U.S.C. 371 (Conspiracy), 42 U.S.C. 6928(d)(2)(A) (RCRA Violation)
- Amount of Fraud: Over $11.2 million in fraudulent progress payments
- Penalty (Viola): 12 months home detention, 60 months probation, $2,287,495.00 restitution
GrimyTimes will continue to follow any further developments in this case and provide updates as they become available.
Source: EPA ECHO Enforcement Case Database
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