Ex-U.S. Army colonel tied to Tilton equity firm reaches plea deal
By Nate Raymond (Reuters) - A retired U.S. Army colonel has agreed to plead guilty to negotiating a job with financier Lynn Tilton's private equity firm while also taking steps to ensure a helicopter company it controlled got paid faster by the Department of Defense. A plea agreement for retired officer Norbert Vergez was filed on Tuesday in a federal court in Alabama. Vergez also agreed to admit to failing to disclose receiving $30,000 for relocation expenses from his future employer, court papers show. “Col. Vergez has fully accepted responsibility for his conduct," Vergez's lawyer, Lee Stein, said in a statement emailed to Reuters. "This has been a difficult process and Col. Vergez is looking forward to putting it behind him,” he said. The papers filed Tuesday do not identify by name Patriarch Partners, Tilton's $8 billion New York private equity fund, or Mesa, Arizona-based MD Helicopters, a company it controls. But Vergez, an ex-program manager for the Army's Non-Standard Rotary Wing Aircraft office in Huntsville, Alabama, joined Patriarch as a senior vice president after retiring. Patriarch said on Wednesday that it and MD Helicopters "cooperated fully" with the investigation. "Mr. Vergez's plea agreement does not contain any allegations of improper conduct by MD Helicopters, Patriarch Partners, or any of their personnel," Patriarch said in a statement. The plea agreement said that while negotiating his future job, Vergez in 2012 took steps that allowed faster payment to the helicopter company, which engaged in foreign military sales through a U.S. contract Vergez, 49, also made a false statement to the Defense Department's inspector general during a 2012 audit involving Lithuania-based subcontractor Avia Baltika Aviation Ltd, which was overhauling Russian Mi-17 helicopters, the plea agreement said. The inspector general had been probing NSRWA's relationship with Avia Baltika and the circumstances surrounding instructions that allowed it to be paid $3.7 million by prime contractor Northrop Grumman Corp, court records state. Avia Baltika did not respond to an email seeking comment. The U.S. Securities and Exchange Commission has charged Tilton and Patriarch in a separate case with defrauding investors by hiding poor performance of assets underlying three collateralized loan obligation funds. Tilton has denied wrongdoing and sued the SEC to block that case from going forward. Vergez, scheduled to appear in court on April 16, faces up to five years in prison on each of three counts of making false statements and felony conflict of interest. The case is U.S. v. Vergez, U.S. District Court, Northern District of Alabama, No. 15-cr-00086. (Reporting by Nate Raymond in New York; Editing by Paul Simao, Gunna Dickson and Tom Brown)
