David Drill, the former president of Circle Systems Group Inc., the sports equipment refurbishing company, admitted Tuesday to submitting phony quotes and giving gifts to athletic directors, equipment managers, trainers and coaches in return for business, according to the Star Ledger of New Jersey. Court papers say the company's sales force paid for clothing, golf clubs or made donations while billing schools for services never provided.
David Drill, 60, of Easton, PA, pleaded guilty to a count of conspiracy to commit mail and wire fraud before U.S. District Judge Dickinson Debevoise in Newark. He faces a maximum sentence of five years in prison and a $250,000 fine when he is sentenced. No sentencing date was set. Drill had agreed to cooperate in the investigation.
In admitting his guilt, Drill said he was aware that members of the company's sales team had provided school officials with bogus estimates for reconditioning work seemingly submitted by Circle competitors, along with the bribes, according to The Star Ledger.
Prosecutors declined to say which schools were involved, nor would they talk about the extent and nature of the payoffs.
Court papers filed in Newark stated that an unidentified school purchasing official in New Jersey was given a $500 set of golf clubs from a Circle salesman in 2004. In another case, a Circle salesman spent $481 in 2006 on clothes and other items for the wife of school purchasing official. A third cited in legal documents stated a Circle salesman paid $1,152 last year to get a school purchasing official a leather jacket, a suede jacket, a lamb skin jacket, sweaters and shirts. Circle also made unspecified charitable donations at times.
In each case, Circle recovered what had been spent on those items by billing those schools for goods and services that were never provided, the court papers added.
Drill told the court that Circle got around a regulation requiring school purchasing officials to obtain price quotes from three different companies for good and services by supplying fake quotes from two other firms. He said he was aware of the fraud and was involved in it.
Drill said he had been employed by Circle System from 1982 until last year, starting as a salesman and rising to president in 1988. As president, he was responsible for the daily operations of the sales force, he said.
Circle Systems merged with Schutt Sports of Litchfield, IL in 2005, assuming Schutt's reconditioning work that year after a private equity firm bought a majority interest in each. Circle traces its roots in Easton back more than 60 years and has become nationally known for reconditioning athletic equipment.
