Last week the US Attorney’s Office for the District of Kansas announced that two high-ranking managers employed by Glock, Inc., along with their wives, had been charged with taking more than $1 million in bribes from 2003 through 2011.
According to the indictment, Kansas-based firearms distributor John Sullivan Ralph secretly paid the Glock executives, James Dutton and Welcome D. Wood, to receive preferential treatment for his company, Global Guns & Hunting Inc. In addition to giving Ralph’s business priority access to a limited stock of firearms, Dutton and Wood enabled Ralph to sell firearms to the general public that were originally intended for law enforcement. Their wives, Lisa Dutton and Paula Wood, have also been charged for helping to conceal the existence of the bribes.
“The indictment alleges that from 2003 to 2009 Ralph used the U.S. Postal Service to send and receive approximately 140 bribes and kickbacks that were delivered to defendants Lisa Dutton and Paula Wood. Between 2009 and 2011, the indictment alleges, Ralph used wire transfers to send approximately 80 bribes and kickbacks,” the press release stated.
Due to the high demand for its products, Glock maintains two sales channels for distributors: one for sales to law enforcement (“blue label”) and one for the commercial market (“red label”). Prices for blue label products are generally lower because law enforcement agencies buy in bulk. Dutton and Wood are charged with providing Ralph with information on how to convert blue label products into red label items—making them available for sale to the public. Ralph would procure the firearms from Glock at the blue label discount and make a massive profit reselling the pistols commercially.
“Ralph is alleged to have sold at least 14,000 pistols to commercial buyers—including Cabela’s,” the press release stated.
In a copy of the indictment obtained by The Topeka Capital-Journal, the blue label pistols also came with three magazines instead of the customary two in the red label case. This netted Ralph an additional 12,000 magazines, which he later sold separately.
The five co-defendants are now charged with one count of conspiracy, 11 counts of wire fraud, and 10 counts of money laundering. The penalty for conspiracy and wire fraud both have a maximum penalty of 30 years in prison and a $1 million fine on each count. Money laundering carries a maximum penalty of 20 years and a fine of up to $50,000.
According to The Kansas City Star, Glock filed a lawsuit in Federal Court against Ralph when the company first discovered the scheme in 2012. That case is still pending.