Delaware County Business Owner Charged With Fraud Against The United States

PHILADELPHIA – Kenneth Narzikul, 59, of Media, PA was charged today by information with major fraud against the United States, obstruction of audit, and making false claims to the government, in connection with operation of his business, NP Precision, Inc., a machine tool business located in Folcroft PA. .

According to the information, Narzikul was President and 85% owner of NP Precision, responsible for all aspects of NP Precision’s business, which included contracting with federal agencies to produce critical hardware components used in military helicopters and other aircraft.  The information charges that as early as 2007, Narzikul began misusing progress payments on contracts with the United States, by failing to pay subcontractors and requesting progress payments under the contracts for costs that NP Precision had not actually incurred, and without the intention of using the progress payments for the costs and contracts at issue, in violation of Federal Acquisition Regulations (FAR).  The information charges that Narzikul schemed to fraudulently divert and steal approximately $1.2 million in progress payments that the United States paid NP Precision under two contracts to produce drive shaft couplings for the U.S. Army helicopter Model CH-47, commonly known as a Chinook helicopter. Consequently, it is alleged that the United States received a very belated and many times incomplete product, far later than required under the delivery schedules.  According to the information, Narzikul made false statements and caused others at NP Precision to make false statements to government auditors, and made false claims to falsely reflect progress on numerous Army and Air Force contracts and to continue to receive progress payments from the United States.  The information charges that, at the direction of Narzikul, NP Precision used the diverted funds to pay outstanding obligations on other contracts and other business and personal expenses of the defendant and his family.

“The fraud alleged here was uncovered by the diligent efforts of our agents along with our federal law enforcement partners,” said Frank Robey, Director of the United States Army Criminal Investigation Command’s Major Procurement Fraud Unit (MPFU). “Today’s charges should serve as a warning to others who might try to defraud the U.S. government -- no matter how deep you try to bury the evidence of your crime, we will find it.”    

If convicted, the defendant faces a maximum possible sentence of 20 years in prison, three years of supervised release, a fine of up to $1.5 million, and a $300 special assessment.  Full restitution of up to approximately $1.2 million also may be ordered.     

The case was investigated by the Major Procurement Fraud Unit (MPFU) of the United States Army Criminal Investigative Command (Army CID), the Defense Criminal Investigative
Service (DCIS); and the United States Air Force Office of Special Inspection (Air Force OSI).  It is being prosecuted by Assistant United States Attorney Mary E. Crawley.

Click here to view the indictment

An Information is an accusation.  A defendant is presumed innocent unless and until proven guilty.

UNITED STATES ATTORNEY'S OFFICE, EASTERN DISTRICTof PENNSYLVANIA
Suite 1250, 615 Chestnut Street, Philadelphia, PA 19106
PATTY HARTMAN, Media Contact, 215-861-8525