President and secretary of Cherry Hill machine shop plead guilty for violating federal…

President and secretary of Cherry Hill machine shop plead guilty for violating federal anti-kickback act

John Schallenhammer, 57, of Atco, and his sister, Theresa Schallenhammer, 53, of Cherry Hill, pleaded guilty in Newark federal court.

The president and secretary of a Cherry Hill machine shop admitted to paying kickbacks in return for subcontract work from a Philadelphia company that manufactured military parts for the U.S. Navy.

John Schallenhammer, 57, of Atco, and his sister, Theresa Schallenhammer, 53, of Cherry Hill, pleaded guilty on Oct. 24 before U.S. District Judge William J. Martini in Newark federal court to separate informations charging them with conspiracy to violate the federal anti-kickback act. They were both released on $50,000 unsecured bond.

According to documents filed in this case and statements made in court,

Christopher Sanchirico, 55, of King of Prussia, was the assistant purchasing manager for an entity identified in the information as “Subcontractor 1,” which was located in Philadelphia and manufactured shock-hardened circuit breakers and switchgears for installation on U.S. Navy surface ships, submarines and aircraft carriers. Subcontractor 1 performed work on multiple U.S. Navy and Defense Logistics Agency maritime contracts as a first-tier subcontractor to a prime contractor working for the United States.

In July 2013, John Schallenhammer, the president of a machine shop identified in the information as “Subcontractor 2,” made an agreement with Sanchirico. In return for Sanchirico’s assistance in securing a manufacturing contract between Subcontractor 1 and Subcontractor 2, John Schallenhammer paid Sanchirico between 5 and 10 percent of the gross revenue from circuit breaker and switchgear components that Subcontractor 2 provided to Subcontractor 1. Theresa Schallenhammer, Subcontractor 2’s secretary, maintained records of the payments and sometimes made bank withdrawals for the kickbacks when John Schallenhammer was unable to do so.

From 2013 to 2016, the Schallenhammers paid Sanchirico approximately $150,000 in cash kickbacks.
John and Theresa Schallenhammer both face a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense. Sentencing for both defendants is scheduled for Feb. 6, 2018.

Sanchirico pleaded guilty to a related charge on Oct. 10 and awaits sentencing.