DEPUTY ADMITS COPTER SCHEME

A special sheriff's deputy whose job was to keep an Arkansas department's lone helicopter in operation by obtaining surplus federal parts admitted Monday he acquired extra parts to sell for his own profit. John S. McHann, 45, of Millington pleaded guilty to the wire fraud and money-laundering scheme in a criminal information presented before U.S. Dist. Judge Julia Gibbons. He faces up to 20 years in prison when sentenced in January, although federal prosecutors say they likely will recommend a lighter sentence because of his substantial cooperation.

McHann, a FedEx employee, also owned and operated Southern Flying Services, which contracted aviation services with the State of Arkansas in a federally funded marijuana eradication program.

He also worked as a special deputy in the Mississippi County (Ark.) Sheriff's Department. That's where he obtained excess parts through a Defense Department re-utilization program designed to help federal, state and local law enforcement agencies.

"Mr. McHann began making false statements that parts and aircraft were going to be used by the Mississippi County Sheriff's Department aviation unit when in reality Mr. McHann intended to sell the parts through Southern Flying Services and keep the proceeds," federal prosecutor Steve Parker said in court Monday. "Despite the fact that the MCSD helicopter was flying only 100 hours a year, Mr. McHann falsely stated to the Defense Department that Mississippi County was flying so much they needed additional helicopters and parts."

Parker said McHann also obtained a helicopter for use in law enforcement, but instead sold it to a private aviation company in California for $110,000. Authorities said McHann made more than $200,000, starting in 1996 when he contracted with the sheriff's department.

The criminal information, which is an alternative to a grand jury indictment, says McHann told the Erie County (N.Y.) Sheriff's Department in 1996 that Mississippi County badly needed parts because it was flying five helicopters.

The New York department then shipped about $90,000 worth of government surplus parts to McHann, some of which he sold for his own benefit, according to the information.

In another instance in 1996, the document said, McHann told Defense officials in St. Louis that Mississippi County needed another OH58 helicopter. A helicopter, issued from Fort Rucker, Ala., was sold through his flying service and McHann kept the money, authorities said.

Authorities said McHann used $55,000 of the money he made in the transactions to buy a lot in Shelby County where he built a home.

As part of his plea agreement, McHann will forfeit $142,200 in cashiers' checks to the government and assets in an escrow account in lieu of fines and restitution.

His attorney, James Garts Jr., said he will present mitigating information on his client's behalf at sentencing.

The case is the result of a three-year inquiry, which is ongoing, by the Department of Defense Criminal Investigative Service, the Internal Revenue Service-Criminal Investigation Division, the Defense Logistics Agency and the U.S. Attorney's Office.