Outsourced Manufacture of Military Items to China

On September 13, 2011, Staff Gasket Manufacturing Corporation, a defense contracting company in New Jersey, was sentenced in the District of New Jersey to five years probation and ordered to pay $751,091 in restitution and an $800 special assessment. Eric Helf, Staff Gasket’s president was sentenced to three years probation, a $500 fine and a final order of forfeiture was entered for $49,926. On April 19, 2011, Staff Gasket pleaded guilty to Arms Export Control Act and wire fraud violations, while Helf pleaded guilty to one count of wire fraud. From August 2004 to March 2006, Staff Gasket entered into contracts with the Department of Defense to provide replacement parts for use in military operations. Many of the parts to be supplied were critical application items and were thus required to be manufactured in the United States. Nonetheless, Staff Gasket contracted with foreign manufacturers, including in China, and many of the parts ultimately supplied to the Defense Department, including lock pins for helicopters, were made overseas, substandard, and failed in the field. As a result, Staff Gasket caused the Defense Department to sustain losses of some $751,091 in connection with the fraudulent contracts. This investigation was conducted by DCIS and ICE.