Attorneys for Christopher J. Alf and the federal government are negotiating an agreement that would allow Alf to retake command of National Air Cargo, the Orchard Park freight company that took a felony guilty plea and paid $28 million last year to settle a fraud case filed by the government.

Alf, 44, who now lives in Boca Raton, Fla., won a preliminary injunction Oct. 29 from a federal judge in Washington, D. C., who lifted Alf’s ban on doing business with the government.

The injunction was granted by U. S. District Judge Ricardo M. Urbina, who ruled that the Air Force record did not contain sufficient evidence to prove that Alf “participated in, knew of, or had reason to know of NAC’s criminal, fraudulent and seriously improper conduct, as alleged by the government.”

In opposing the granting of an injunction, Assistant U. S. Attorney Rudolph Contreras had argued that giving Alf the power to contract with the government in a time of war “jeopardizes national security and would be adverse to the important public interest of assuring that federal contracts are only awarded to responsible contractors.”

National Air Cargo gets 90 percent of its business from the government and has received more than $400 million in government contracts, much of it military cargo sent to Iraq and Afghanistan.

National Air Cargo has remained in business, but without Alf at the helm. He and four employees, including his wife, Lori, left the company under an agreement that allowed Alf to remain the company owner but mandated that he turn over control to an independent board.

The injunction itself does not guarantee Alf’s return to National Air Cargo. The judge declined to rule on the 10-year blind-trust agreement that Alf signed.

However, the person who succeeded Alf as National Air Cargo’s chief executive officer, Preston G. Murray, former CEO of Murray Air in Michigan, said Alf’s return is likely.

“Mr. Alf, the Department of Justice and the Air Force have been in discussions,” Murray said in a telephone interview, “and those discussions are coming to the position where he can return to the company.”

Steven A. Shaw, the Air Force contracting officer who debarred Alf, said he could not comment on the case.

One of Alf’s attorneys said he approved the company’s guilty plea as the only way for National Air Cargo to stay in business.

“It was clear to Alf and his management team that NAC would not be able to survive an indictment no matter how confident they were that they would be found not to have violated the law at a trial many months or even years in the future,” said Alf attorney John J. Walsh of New York City. “NAC would cease to exist while proving its innocence in court.”

Walsh made that statement in a still-pending defamation suit that Alf filed against The Buffalo News and two of its reporters Oct. 23, 2008, alleging that the newspaper mischaracterized the federal court action against National Air Cargo.

Alf could not be reached to comment through the company or its public relations consultant.

Alf’s attorney in the injunction case, W. Jay DeVecchio, argued that the company pleaded guilty to only a single count of making a false statement in regard to a $400 delivery.

“NAC expressly denied wrongdoing or fault except for the single statement identified in the plea,” DeVecchio wrote.

Government attorneys scoffed at the assertion, which also was made in the injunction case.

“It simply defies logic, however, that a single shipment that arrived two days late could possibly have cost the government $4.4 million. Moreover, NAC’s criminal plea, which plaintiff consented to as NAC’s CEO and sole shareholder, stated that the relevant conduct lasted for more than three years,” Contreras, the assistant U. S. attorney in Washington, D. C., argued in the motion prior to the judge’s ruling.

The Air Force, in ordering Alf debarred from government work, said that it had looked at 6,800 shipments between March and June 2001, and between January and March 2002. The review concluded that in about 2,995 of those shipments, NAC delivered the freight late but billed the Defense Department as though the freight had been delivered on time.

For his own analysis, Alf hired former Air Force Col. Glen G. Joerger.

Joerger said the record showed only enough information to determine whether 45 of those 6,800 shipments were late. Out of the 45, Joerger said 44 were delivered on time.

The Air Force said Joerger’s analysis was “flawed and incomplete,” the government said in its brief, but did not say why.

Government prosecutors said at the time of National Air Cargo’s guilty plea that the company had committed a serious crime.

Terrance P. Flynn, the U. S. attorney for Western New York at the time, had this to say of National Air Cargo:

“This felony conviction, which includes the largest criminal and civil penalties ever imposed in the Western District of New York, makes it clear that dishonest corporate entities are not immune from bearing substantial consequences arising from their deliberate attempts to cheat the American public.”

The head of the U. S. Justice Department’s Civil Division at the time, Jeffrey C. Bucholtz, said of the guilty plea last year: “Today’s settlement demonstrates the United States’ determination to ensure that contractors doing business with our military departments do not divert resources needed for the war effort into their own pockets through fraud.”

And attorney Daniel C. Oliverio, who, along with fellow lawyer Joseph V. Sedita, represented a whistle-blower who first brought the accusations against National Air Cargo to the government’s attention, thought the $3.3 million that NAC paid to their client was not enough.

“We thought that in light of all he did, including uncovering this enormous fraud, that the amount the government suggested was insufficient,” Oliverio said.

Part of Alf’s argument for lifting the ban was that he had suffered irreparable economic harm by being excluded from National Air Cargo’s daily operations.

The government countered by saying the Alfs had donated equipment to Women & Children’s Hospital in Buffalo.

In addition, Lori Alf told the Palm Beach Post that she has spent $12.2 million in the last year building an Olympic-size rink for competitive ice skating in a facility she calls the Palm Beach Ice Works in West Palm Beach.

The Alfs live in a $10.4 million mansion in West Palm Beach and still maintain a $2 million estate on the shore of Lake Erie.

Lori Alf filed a separate lawsuit contesting her debarment. It earlier was reduced to seven months by the Air Force, and her attorneys and the Air Force also are discussing a settlement.