YOU READ IT HERE FIRST : A defense contracting company and its president admitted in federal court in Newark today to substituting foreign-made knockoffs for U.S. military equipment they were paid to build.
Representatives of Staff Gasket Manufacturing Corporation (“Staff Gasket”), which moved to Alpine from Englewood while the case was pending, pleaded guilty to wire fraud and a violation of the Arms Export Control Act.
In addition, company president Eric Helf, 38, of New York, pleaded guilty to conspiracy to commit wire fraud in connection with the scheme.
Staff Gasket won U.S. Department of Defense (DoD) contracts to provide replacement parts for use in military operations from August 2004 through March 2006. By finding manufacturers willing to produce cheaper work instead of doing it themselves, the government said, conspirators at Staff Gasket were able to submit a winning low bid.
However, many of the parts were deemed “critical application items” that the government required be made in the U.S. to certain specifications. Even the drawings were prohibited from being exported, a federal agent notes in a complaint on file with the U.S. District Court in Newark.
The DoD pegged the overall loss at $751,091.
Under the terms of a plea deal, Staff Gasket has promised to make good on those losses, along with an additional forfeiture of $50,000. The company is also looking at a fine of from $728,000 to $1.45 million when U.S. District Judge William J. Martini metes out the sentences on Aug. 2.
Helf, meanwhile, has agreed to forfeit $49,926, U.S. Attorney Paul S. Fishman said. He faces a potential five years in federal prison and a $250,000 fine.
Fishman credited special agents of the DoD’s Defense Criminal Investigative Service and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations for making the case, prosecuted by Assistant U.S. Attorney Philip James Degnan of the U.S. Attorney’s Office National Security Unit in Newark.