July 16, 2010 08:15:00 AM

PENSACOLA — Two men, a former employee of the federal Bureau of Prisons and a former contractor for the bureau, were arrested Thursday and charged with conspiracy to manipulate the sale of surplus equipment from the UNICOR factory in Marianna for their personal gain.

James Lee Bailey, 42, and Lee J. Temples, 36, face a 37-count indictment charging the men with conspiracy, money laundering, wire fraud, conflict of interest and deprivation of honest services. Bailey also is charged with two counts of making false statements and Temples is charged with one count of obstruction of justice.

The indictment alleges between 2004 and 2007 the cousins maintained an undisclosed business relationship involving Fast-Lane Computers and E-Surplus Solutions.

The UNICOR operation in Marianna recycles computers and other electronic equipment obtained from government agencies. The equipment is refurbished by BOP inmates and sold for profit by UNICOR.

According to the indictment, Bailey, who was the factory manager and industrial specialist at the Marianna facility, directed the highest quality equipment to Temples, an eBay contractor for UNICOR, and took steps to eliminate potential competition from other UNICOR contractors. The result, according to the indictment filed in U.S. District Court in Pensacola, was Temples became the exclusive eBay contractor for UNICOR responsible for selling the recycled computers.

Profits from the arranged sales were split between the two defendants, with Bailey receiving $228,252 over three years.

The case was investigated by the Internal Revenue Service and the Department of Justice and is being prosecuted by Assistant U.S. Attorney Stephen Preisser.

If convicted, each defendant could face up to five years imprisonment for conflict of interest violations, 20 years for wire fraud, 20 years for deprivation of honest services, five years for false statements, and 20 years for obstruction of justice.

The indictment also seeks forfeiture of any real or personal property traceable to the alleged crimes.

Both men were released on their own recognizance after their first appearance before U.S. Magistrate Judge Miles Davis Thursday in Pensacola.