Two accused of rigging City of Pittsburgh contract
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A security firm founder and a City of Pittsburgh employee conspired to rig a 2007 contract awarded by the city to install radios and computers in police cruisers, according to a federal indictment unsealed Friday.
Arthur J. Bedway Jr., 63, of Robinson, created Esplen-based Alpha Outfitters, which won the city contract after masquerading as a woman-owned business, according to the seven-count indictment. Christine Ann Kebr, then a systems analyst for the city's Computer Information Systems Department, helped craft both the city's selection process and Alpha Outfitters' bid, then aided the company in getting its inflated bills paid, according to a criminal information charging her with conspiracy.
Then around Christmas in 2007, Mr. Bedway gave Ms. Kebr "an envelope containing $3,000 in cash" in return for her help, the indictment said.
Mr. Bedway made his initial appearance before U.S. Magistrate Judge Maureen Kelly, and was released on $100,000 unsecured bond. He is allowed to travel to Florida, where he has business interests, but must not have any contact with victims or witnesses in the case.
He did not speak during the brief appearance.
Judge Kelly told him that he faces a maximum of 20 years in prison on five mail fraud counts, 10 years on a bribery count, and five years on a conspiracy count.
Federal sentences, though, are usually driven by the amount of money gained in a scheme and the defendant's criminal history.
Mr. Bedway's attorney, Martin Dietz, would not discuss the specifics of the case, but said the city was not ripped off.
"The City of Pittsburgh got the benefit of a bargain," said Mr. Dietz. "My understanding is that Alpha Outfitters did submit the lowest bid, and they did the work." The company also serviced vehicles for other municipalities, he said.
The founder of several local companies, Mr. Bedway was once a close friend of police Chief Nate Harper. In an email response to questions, Chief Harper reiterated that he had no role in the city's selection of Alpha Outfitters, as he told the Pittsburgh Post-Gazette when interviewed for a story on Mr. Bedway last year.
The bureau "had no involvement in securing this contract or making any payments," nor was the bureau involved in the investigation, the chief wrote in an email that also described Mr. Bedway as "a past friend."
Mr. Bedway, Ms. Kebr and an unnamed person met around Oct. 27, 2006, to discuss the creation of the business, the charge against Ms. Kebr said. An unnamed woman was brought in as the "straw owner."
State records said that Alpha Outfitters was created by Lois Kolarik, who was at one time an employee of Victory Security, a Carnegie-based firm founded by Mr. Bedway.
Around May 2007, Mr. Bedway and Ms. Kebr met at Victory's office, according to the charge against her, and drafted Alpha Outfitters' bid. Then in July she recommended to other officials that the city award the bid to that firm, it said.
Later, she helped Alpha Outfitters to submit invoices "which inflated the amount of and work performed" by the firm, the indictment said.
The city paid around $330,000 under the contract.
Ms. Kebr was hired by the city in 2001, and left in July 2011 as a senior systems analyst 3 earning $60,591 a year. City officials would not describe the nature of her departure. Ms. Kebr could not be reached for comment.
An arrest warrant for Mr. Bedway was issued on Tuesday. There is as yet no arrest warrant for Ms. Kebr.
Victory Security has been credited with reducing crime in several housing developments. The firm retained Chief Harper's wife for a time as a consultant, but as of September 2011 she was no longer working there.
The Pittsburgh Housing Authority has used Victory Security to provide armed guards, unarmed guards and later constable-equivalent security at its communities.
In August, however, the authority terminated one contract with Victory, saying the firm had failed to place enough constables in seven communities. The contract was ended nearly three months after a constable who had managed much of the operation for Victory, but who was fired by the firm, told the Post-Gazette that other personnel were submitting questionable documentation of their work for the authority.
Mr. Bedway was named in court, but not charged, last year in connection with a fraud and money laundering case in which an Arizona man persuaded investors to give him money to buy nonexistent homes. He was also named, but not charged, in a North Carolina case involving kickbacks on development contracts. He has denied any wrongdoing.
First Published November 17, 2012 12:00 am