FOR IMMEDIATE RELEASE
April 18, 2011
NEWARK, N.J. – New Jersey-based defense contracting company, Staff Gasket Manufacturing Corporation (“Staff Gasket”), and its president, Eric Helf, admitted today to military contract procurement fraud involving the sale of replacement parts for use in military operations, U.S. Attorney Paul J. Fishman announced. Staff Gasket also pleaded guilty to a violation of the Arms Export Control Act.
Staff Gasket, now located in Alpine, N.J., and previously located in Englewood, N.J., pleaded guilty to a two-count Information charging wire fraud and an export control violation. Helf, 38, of New York, entered a guilty plea to an Information charging one count of conspiracy to commit wire fraud in connection with the scheme. Both Helf and the company entered guilty pleas before U.S. District Judge William J. Martini in Newark federal court.
According to documents filed in this case and statements made in court:
From August 2004 through March 2006, Staff Gasket entered into contracts with the U.S. Department of Defense (DoD) to provide replacement parts for use in military operations. Many of the parts to be supplied under DoD contracts were deemed Critical Application Items that were required to be manufactured in the United States to the exact specifications in the contracts.
Staff Gasket contracted with manufacturers outside of the United States who manufactured the items at a much cheaper price per unit than had the items been manufactured in the United States using domestic product. As a result, Staff Gasket was able to win DoD contract awards by using lower bids that violated the terms required by the DoD for requests for quotes and contracts. As a result, Staff Gasket caused the DoD to sustain losses of approximately $751,091 in connection with the fraudulent contracts. Helf admitted to a particular instance of wire fraud relating to one of the fraudulently obtained contracts.
Under the terms of the plea agreement, Staff Gasket has agreed to pay make full restitution to the DoD for the losses and to an additional forfeiture of $50,000. Staff Gasket is also subject to a fine of between $728,000 and $1,456,000. Helf has agreed to forfeit $49,926. The count to which he pleaded guilty carries a maximum potential penalty of five years in prison and a $250,000 fine. Sentencing is currently scheduled for August 2, 2011.
U.S. Attorney Fishman credited special agents of DoD's Defense Criminal Investigative Service, under the direction of Special Agent in Charge Edward T. Bradley, and U.S. Immigration and Customs Enforcement's Homeland Security Investigations, under the direction of Special Agent in Charge Peter T. Edge, for the investigation leading to the guilty pleas.
The government is represented by Assistant U.S. Attorney Philip James Degnan of the U.S. Attorney’s Office National Security Unit in Newark.
Defense counsel: Charles A. Stillman, Esq, and James A. Mitchell, Esq., New York