Three Defense Fraud|Convictions in San Diego

SAN DIEGO (CN) - A federal jury on Monday convicted two defense contractors and a corporation of conspiracy and bribery at a Naval Air Station North Island.

Convicted were Robert Ehnow, owner and president of defense contractor L&N Industrial Tool & Supply Inc.; Joanne Loehr, owner and operator of defense contractor Centerline Industrial, and Centerline itself. Both businesses are in Poway, north of San Diego.

All the defendants were charged with conspiracy to commit wire fraud, bribery, and money laundering, and with bribery, the U.S. Attorney's Office said in a statement announcing the verdicts.

The jury convicted all three of conspiracy and bribery, and cleared them of some bribery counts, prosecutors said.

In return for getting millions of dollars in defense contracts, the defendants showered Navy officers with gifts, including cash, checks, retail gift cards, flat screen television sets, luxury massage chairs, bicycles costing thousands of dollars, and model airplanes, prosecutors said. L&N and Centerline also laundered money, according to the U.S. attorney.

"During the course of the conspiracy, the Department of Defense paid Ehnow's company, L&N, over $3 million," prosecutors said in the statement. "Centerline obtained over $1.5 million in payments from Defense Department during the conspiracy. A third defense contractor, X&D Supply, Inc. ('X&D'), located in Carlsbad, California, was paid over $2 million during the conspiracy.

"L&N, also known as Mardoc Corporation, filed for Chapter 7 bankruptcy in June 2011. Centerline remains in business."

Eleven defendants have been convicted, including five Navy officers.

Ehnow, 46, of Coronado, and Loehr, 52, of La Jolla, could be sentenced to more than 60 years in prison.

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