Canadian Night Vision Goggle Manufacturers Accused in Conspiracy to Defraud U.S. Military

A federal grand jury in San Francisco has indicted a Canadian night vision goggles manufacturing firm and two of its executives for in an alleged scheme to defraud the U.S. military in the supply of equipment for the Iraqi army, according to Department of Justice officials.^[1]

The indictment, returned on Dec. 4, 2007, charges Michael Beker, also known as Mendel Beker, President and Chief Executive of Newcon Optik Ltd., Arie Prilik, the former senior Vice President of Newcon Optik, and the company itself with two counts each of wire fraud and one count each of conspiracy to commit wire fraud.^[2] In addition, Beker and Newcon Optik were also each charged with one count of money laundering. Both Beker and Prilik have been arrested by the York Regional Police in Toronto, Canada.^[3]

Beker, Prilik and Newcon Optik Ltd. are accused of attempting to defraud the U.S. Army’s Tank-Automotive and Armaments Command (TACOM), a military unit tasked with equipping and training the Iraqi Army. The alleged scheme could have resulted in the U.S. military being overcharged approximately $11 million.^[4]

The indictment accuses Beker, Prilik and Newcon Optik of agreeing to pay a competitor to withdraw from supplying TACOM with night vision goggles so that they could step in and supply TACOM with night vision goggles at a higher price.^[5] Beker, Prilik and Newcon Optik are alleged to have made an initial payment of $50,000 to a competitor as the first step in the scheme.^[6]

18 U.S.C. § 371 covers the crime of conspiracy. Under that section, if two or more persons conspire either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each shall be fined under this title or imprisoned not more than five years, or both.^[7] If, however, the offense, the commission of which is the object of the conspiracy, is a misdemeanor only, the punishment for such conspiracy shall not exceed the maximum punishment provided for such misdemeanor.^[8]

Beker and Prilik each face up to 20 years in prison for the wire fraud counts, and up to five years in prison and a $250,000 fine each if convicted on the conspiracy count.^[9] Beker faces imprisonment for up to 20 years and a fine of up to $500,000 if convicted of the money laundering charge.^[10] The United States also plans, upon the conviction of Beker, Prilik and Newcon Optik, to seek criminal forfeiture of the $50,000 payment made in the case.^[11]

Federal criminal defense attorney Douglas McNabb has previously written about the crime of conspiracy, here.

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[1] Press Release, United States Department of Justice, Canadian Night Vision Goggles Manufacturer and Two Executives Charged in Scheme to Defraud U.S. Military Procurement Unit for Iraq (April 21, 2008) (available at http://www.usdoj.gov/opa/pr/2008/April/08_at_320.html).
[2] Id.
[3] Id.
[4] Id.
[5] Id.
[6] Id.
[7] 18 U.S.C. § 371.
[8] Id.
[9] Press Release, United States Department of Justice, Canadian Night Vision Goggles Manufacturer and Two Executives Charged in Scheme to Defraud U.S. Military Procurement Unit for Iraq (April 21, 2008) (available at http://www.usdoj.gov/opa/pr/2008/April/08_at_320.html).
[10] Id.
[11] Id.