The president of TMI-Integrated Services in Fort Worth, Tex., pleaded guilty in December to charges that he conspired to overcharge Lockheed Martin Aeronautics Co. and the federal government.

Todd Loftis, president of TMI, pled guilty in mid-December in U.S. District Court in Fort Worth. Loftis and his company had been the subject of an INDUSTRIAL DISTRIBUTION profile in 2003.

The Texas-based distributor had contracts to supply cutting tools to Lockheed Martin facilities in Marietta, Ga., Fort Worth, and Palmdale, Calif. The tools are used to build the C-130J, the F-16 Fighting Falcon, the F-22 Raptor, and the Joint Strike Fighter, among others.

The charges against Loftis said that the company made $18 million in fraudulent profits since 1998. Loftis had negotiated contracts with Lockheed Martin that had Lockheed paying TMI 15 percent to 20 percent more that the cost of the tools, according to the Office of the U.S Attorney for the Northern District of Texas.

The complaint also included allegations that TMI employees were acting at Loftis' direction when they charged Lockheed higher prices than allowed under the terms of Lockheed's contracts with the Department of Defense.

Under those terms, nearly all costs for making the fighter planes and related equipment are paid by the U.S. Treasury Department with a specified, agreed-to margin of profit.

The complaint also said that TMI employees had submitted forged or altered documents to Lockheed's auditors in order to justify the higher prices. TMI employees also destroyed some falsified records as well as shredded documents and erased computer files containing evidence, the U.S Attorney said.

Loftis faces maximum penalties of up to 10 years in prison and fines of up to twice the amount the crimes cost Lockheed and the U.S. government.

TMI, which was established 48 years ago, filed for Chapter 7 bankruptcy in September. A date for Loftis' sentencing has yet to be set.