Three Monmouth County individuals were indicted today for their role in a years-long scheme to defraud the U.S. Department of Defense (DoD) by providing military equipment parts that were not authorized under the governing contracts, U.S. Attorney Philip R. Sellinger announced.
Federal officials said Ms. Linda Mika, 70, and Mr. Paul Mika, 74, both of Jackson and Mr. Kenneth Mika, 50, of Ewing are charged by indictment with one count of conspiracy to commit wire fraud and five counts of wire fraud in connection with the scheme.
Kenneth Mika was additionally charged with two counts of making false statements.
According to documents filed in this case:
From at least March 2016 through April 2020, the Mikas conspired with each other and others to defraud the DoD and one of its combat logistic support arms, the Defense Logistics Agency (DLA), by engaging in a pattern of unlawful product substitution.
Paul Mika was the founder and owner of Monmouth Marine Engines Inc. (Monmouth Marine), a maritime equipment and servicing facility, which, as an approved federal contractor, also entered into contracts with DLA to supply DoD contracting entities with replacement hardware for DoD’s military branches. Linda Mika, Paul Mika’s wife, and Kenneth Mika, Paul and Linda Mika’s son, were employees of Monmouth Marine.
The Mikas, on behalf of Monmouth Marine, obtained contracts with the DoD by falsely claiming that the military parts they contracted to provide would be exact products furnished by authorized manufacturers or suppliers.
Once awarded the contracts, however, the Mikas sourced non-conforming substitute parts at a significantly reduced cost to fill the contracts. They did this to maximize their profit margin while also suppressing fair competition in the bidding of federal contracts.
Upon receipt by Monmouth Marine, the non-conforming parts were then shipped to DLA in packaging disguising the parts’ identities in an effort by the Mikas to deceive DLA and its unwitting downstream purchasers.
During an audit of Monmouth Marine conducted in February 2020, Kenneth Mika falsely stated to DLA auditors that Monmouth Marine had been authorized by certain Defense Contract Management Agency representatives to substitute parts under DLA contracts.
Kenneth Mika repeated these false representations to FBI and Defense Criminal Investigation Service agents in July 2020.
Each count of conspiracy to commit wire fraud and wire fraud is punishable by a maximum penalty of 20 years in prison and a maximum $250,000 fine.
Each count of making false statements is punishable by a maximum penalty of five years in prison and a maximum $250,000 fine.