An Ocean County family who owns a maritime supply store has been charged with defrauding the U.S. Department of Defense by selling the federal government cheap substitution products while billing them for the more expensive parts, the U.S. Attorney General’s Office said Wednesday.
Owner of Monmouth Marine Engines Inc Paul Mika, 73, of Jackson, along with his wife Linda Mika, 69, and their son Kenneth Mika, 49, of Ewing, who are both employees, are accused of obtaining contracts with the federal government by falsely claiming the military parts they contracted to provide would be exact products furnished by authorized manufacturers.
However, once awarded the contracts beginning in March 2017, the family instead sold the U.S. Department of Defense “non-conforming substitute parts at a significantly reduced cost,” according to a criminal complaint filed Wednesday in federal court in Trenton.
To pass off the non-conforming replacement parts as the products required under the contract, the family disguised the identity of the cheaper parts by shipping them in a packaging that masked their origin, prosecutors contend. The complaint alleges the Mikas ran their scheme for three years.
“These defendants sought to make a greater profit by substituting products that were not those they had contractually agreed to provide to the Department of Defense,” U.S. Attorney Carpenito said in a news release. “By doing so, they potentially risked the safety of our men and women in uniform. We will continue to work with our law enforcement partners to root out this kind of fraud.”
The complaint details several contracts awarded to Monmouth Marine Engines Inc. and how the Mikas defrauded the government.
In November 2018, the Defense Logistics Agency, a combat logistic support arm of the Department of Defense, awarded Monmouth Marine a contract for 89 gasket sets from an Indiana corporation at a unit price of $257.20 and total cost of $22,890, authorities said.
But in January 2019, Paul Mika signed a purchase order confirming Monmouth Marine’s purchase of 89 non-conforming gasket sets from a Georgia corporation for a total cost of $6,675, the complaint alleges.
All three are charged with one count of conspiracy to commit wire fraud, which carries a maximum potential penalty of 20 years in prison and a $250,000 fine, the Attorney General’s Office said.
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