By TAPinto West Essex Staff
Published June 28, 2024 at 7:48 AM
Last updated June 28, 2024 at 7:48 AM
NEWARK, NJ -- A Roseland man faces up to 20 years in prison after he admitted on Thursday to engaging in multiyear schemes to defraud the U.S. Department of Defense (DoD) by providing military equipment parts that were not authorized under the governing contracts and agreeing with another individual to rig bids for DoD contracts, U.S. Attorney Philip R. Sellinger announced.
Alan Aranowitz, 75, pleaded guilty before U.S. District Judge Julien X. Neals in Newark federal court to two counts of wire fraud conspiracy.
According to documents filed in this case and statements made in court:
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1) During a three-year period between 2015 and 2018, Aranowitz conspired with 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. Aranowitz owned and operated Arlo Corporation (Arlo), which entered into contracts with the DoD to supply replacement parts for the military, including screws, nuts and bolts. Aranowitz conspired with the owner/operators of two companies to provide cheaper counterfeit and/or non-conforming parts to the DoD.
Aranowitz sometimes falsely claimed that the parts would be MIL-SPEC -- suitable for military use because the parts had met certain specific requirements — when he actually submitted such bids intending to provide parts that were not MIL-SPEC. Aranowitz sometimes falsely represented that the parts would be “Exact Product,” that is, that they derived from a particular manufacturer, when, in fact, he submitted such bids intending to provide parts that were not Exact Product.
He also sometimes falsely represented that Arlo or one of the companies he conspired with would be the manufacturer of the parts, when in fact he knew that Arlo or that company would not be the manufacturer. Aranowitz sometimes submitted bids to the DoD in the name of one of the companies with the owner/operator’s knowledge and approval. By committing these acts, Aranowitz and his conspirators increased their own profits. DLA received numerous Product Quality Deficiency Reports (PQDRs) from U.S. military end users reporting that a particular part supplied by Arlo did not physically conform to the contract specifications.
As part of the plea, Aranowitz agreed to forfeit $684,168 in proceeds of the fraudulent scheme charged in Count One and to pay restitution in the amount of $878,644 to the DoD.
2) From 2017 through August 2018, Aranowitz conspired with the owner and operator of a company to defraud the DoD and DLA by coordinating bid prices, engaging in bid rigging, with another DoD contractor. Arlo, like all DoD contractors, was required to certify that it had arrived at its bids independently and without consulting or colluding with any other offeror or competitor. On the contrary, Aranowitz regularly consulted with another DoD contractor regarding the bids that each was submitting.
The charges of wire fraud conspiracy each carry a statutory maximum of 20 years in prison, and a $250,000 fine, which could run consecutively. Sentencing is scheduled for Oct. 29.
(A release from the U.S. Attorney's Office, District of N.J.)