Two Michigan businessmen and three companies they control pleaded innocent Friday to charges they bilked a Scott Paper Co. mill out of up to $1 million by bribing an engineer and putting his wife on their payroll. Federal prosecutors say Gerald M. Chernow, 49, and William M. Engelman, 52, cheated the S.D. Warren mill in Westbrook by persuading maintenance engineer David Hilt to buy unneeded maintenance and roofing equipment that was marked up by up to 20 times its cost. Initially, Hilt was given merchandise, gift certificates and money orders, and later, his wife, Ellen, was put on the payroll of one of the Michigan companies, First Assistant U.S. Attorney Jack Gleason said. Chernow and Engelman, both of Bloomfield Hills, Mich., entered innocent pleas before U.S. Magistrate David Cohen. Chernow and Engelman were freed on their own recognizance, but they must hand over their passports and will be required to pay $50,000 bond if they fail to show up to any court proceedings, Gleason said. The two businessmen had appeared in court without being arrested. The two are charged with conspiracy, mail fraud and the use of interstate facilities in furtherance of private bribery. Both businessmen declined to comment on the case, as did defense attorney Julian Sweet of Lewiston. Also named as defendants in the 21-count indictment are Modern Research Corp. and Lincoln Technical Services Inc., both of Troy, Mich., and ABC Chemical Co. of Detroit. If Chernow and Engelman are convicted on all counts, they face up to 105 years in prison and fines totaling $5.25 million each, the prosecutor said. Modern Research and Lincoln Technical Service each face up to $10.5 million in fines, while ABC Chemical could face $6.5 million in fines. Philadelphia-based Scott Paper lost between $750,000 and $1 million in the scheme, the government says.
