Feds: Monmouth Marine Engines Inc. Defrauded the Military, Put Troops Lives At Risk

Paul and Linda Mika the owners of Monmouth Marine Engines, Inc., and their son/employee Kenneth Mika, 49, have been arrested and charged by the U.S. Attorney’s Office with delivering cheap and unauthorized military equipment parts to the U.S. Department of Defense under a years long contract, according to an announcement by U.S. Attorney Craig Carpenito.

From at least March 2017 through February 2020, the Mikas conspired with each other and others to defraud the DoD and its combat logistic support arm, the Defense Logistics Agency (DLA), by engaging in a pattern of unlawful product substitution.

Paul Mika, 73 of Jackson, was the founder and owner of Monmouth Marine Engines Inc., 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 parts for Naval vessels. Paul Mika’s wife and son, Linda Mika, 69, and Kenneth Mika, 49 of Ewing, 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. 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’ identity in an effort by the Mikas to deceive DLA and its unwitting downstream purchasers.

“As described in the criminal complaint, 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. “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.”

“Protecting the integrity of the defense procurement system is a top priority for the Defense Criminal Investigative Service (DCIS),” Special Agent in Charge Leigh-Alistair Barzey, DCIS Northeast Field Office, said. “This case, which resulted in today’s arrests, confirms the DCIS’ ongoing commitment to work with the USAO-NJ and the FBI, to investigate and prosecute contractors who engage in fraudulent schemes targeting the U.S. Department of Defense.”

The Mikas are scheduled to have their initial appearances this afternoon before U.S. Magistrate Judge Lois H. Goodman in Trenton federal court.

The count of conspiracy to commit wire fraud carries a maximum potential penalty of 20 years in prison and a $250,000 fine.

Monmouth Marine Engines is closed today, according to a post on their facebook page: